Interface (TILE) Showing Signs Of Being Strong And Under The Radar

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Interface ( TILE) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Interface as such a stock due to the following factors:

  • TILE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.3 million.
  • TILE is making at least a new 3-day high.
  • TILE has a PE ratio of 43.8.
  • TILE is mentioned 1.65 times per day on StockTwits.
  • TILE has not yet been mentioned on StockTwits today.
  • TILE is currently in the upper 20% of its 1-year range.
  • TILE is in the upper 35% of its 20-day range.
  • TILE is in the upper 45% of its 5-day range.
  • TILE is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on TILE:

Interface, Inc. designs, produces, and sells modular carpet products primarily in the Americas, Europe, and the Asia-Pacific. The stock currently has a dividend yield of 0.7%. TILE has a PE ratio of 43.8. Currently there are 5 analysts that rate Interface a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Interface has been 632,800 shares per day over the past 30 days. Interface has a market cap of $1.5 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.47 and a short float of 2.8% with 1.67 days to cover. Shares are up 33% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Interface as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • TILE's revenue growth has slightly outpaced the industry average of 1.0%. Since the same quarter one year prior, revenues slightly increased by 8.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.88, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.35, which illustrates the ability to avoid short-term cash problems.
  • 39.40% is the gross profit margin for INTERFACE INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 5.20% is above that of the industry average.
  • Net operating cash flow has significantly increased by 963.28% to $22.10 million when compared to the same quarter last year. In addition, INTERFACE INC has also vastly surpassed the industry average cash flow growth rate of -11.57%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Services & Supplies industry. The net income increased by 206.1% when compared to the same quarter one year prior, rising from $4.03 million to $12.32 million.

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