Today's Strong And Under The Radar Stock Is Blackhawk Network Holdings (HAWK)

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 Blackhawk Network Holdings ( HAWK) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Blackhawk Network Holdings as such a stock due to the following factors:

  • HAWK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.9 million.
  • HAWK is making at least a new 3-day high.
  • HAWK has a PE ratio of 37.
  • HAWK is mentioned 1.03 times per day on StockTwits.
  • HAWK has not yet been mentioned on StockTwits today.
  • HAWK is currently in the upper 20% of its 1-year range.
  • HAWK is in the upper 35% of its 20-day range.
  • HAWK is in the upper 45% of its 5-day range.
  • HAWK 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 HAWK:

Blackhawk Network Holdings, Inc. provides a range of prepaid gift, telecom, and debit cards; and related prepaid products and payment services. HAWK has a PE ratio of 37. Currently there are 6 analysts that rate Blackhawk Network Holdings a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Blackhawk Network Holdings has been 480,400 shares per day over the past 30 days. Blackhawk Network has a market cap of $480.2 million and is part of the financial sector and financial services industry. The stock has a beta of 0.36 and a short float of 43.2% with 5.89 days to cover. Shares are down 6.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Blackhawk Network Holdings as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 22.5%. Since the same quarter one year prior, revenues rose by 37.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 265.6% when compared to the same quarter one year prior, rising from -$2.84 million to $4.71 million.
  • The current debt-to-equity ratio, 0.60, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.80 is somewhat weak and could be cause for future problems.
  • Net operating cash flow has decreased to -$675.22 million or 30.07% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the IT Services industry and the overall market, BLACKHAWK NETWORK HLDGS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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