Luxottica Group SpA (LUX) Is Today's Strong And Under The Radar Stock

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 Luxottica Group SpA ( LUX) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Luxottica Group SpA as such a stock due to the following factors:

  • LUX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.5 million.
  • LUX is making at least a new 3-day high.
  • LUX has a PE ratio of 57.
  • LUX is mentioned 1.06 times per day on StockTwits.
  • LUX has not yet been mentioned on StockTwits today.
  • LUX is currently in the upper 20% of its 1-year range.
  • LUX is in the upper 35% of its 20-day range.
  • LUX is in the upper 45% of its 5-day range.
  • LUX 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 LUX:

Luxottica Group S.p.A., together with its subsidiaries, provides fashion, luxury, sports, and performance eyewear worldwide. It operates through two segments, Manufacturing and Wholesale Distribution, and Retail Distribution. The stock currently has a dividend yield of 1.2%. LUX has a PE ratio of 57. Currently there is 1 analyst that rates Luxottica Group SpA a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Luxottica Group SpA has been 49,700 shares per day over the past 30 days. Luxottica Group SpA has a market cap of $31.5 billion and is part of the services sector and retail industry. Shares are up 20.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Luxottica Group SpA as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • LUXOTTICA GROUP SPA reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, LUXOTTICA GROUP SPA increased its bottom line by earning $1.62 versus $1.58 in the prior year. This year, the market expects an improvement in earnings ($2.08 versus $1.62).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income increased by 58.6% when compared to the same quarter one year prior, rising from $48.40 million to $76.78 million.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • LUX, with its decline in revenue, underperformed when compared the industry average of 9.9%. Since the same quarter one year prior, revenues fell by 18.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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