Today's Strong And Under The Radar Stock: Cantel Medical (CMN)

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

  • CMN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.1 million.
  • CMN is making at least a new 3-day high.
  • CMN has a PE ratio of 44.
  • CMN is mentioned 0.48 times per day on StockTwits.
  • CMN has not yet been mentioned on StockTwits today.
  • CMN is currently in the upper 20% of its 1-year range.
  • CMN is in the upper 35% of its 20-day range.
  • CMN is in the upper 45% of its 5-day range.
  • CMN 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 CMN:

Cantel Medical Corp. provides infection prevention and control products and services in the healthcare market. The stock currently has a dividend yield of 0.2%. CMN has a PE ratio of 44. Currently there is 1 analyst that rates Cantel Medical a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Cantel Medical has been 120,500 shares per day over the past 30 days. Cantel Medical has a market cap of $1.9 billion and is part of the health care sector and health services industry. The stock has a beta of 1.94 and a short float of 2.7% with 7.13 days to cover. Shares are up 6.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cantel Medical 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 and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.1%. Since the same quarter one year prior, revenues rose by 13.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • CMN's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.45, which illustrates the ability to avoid short-term cash problems.
  • CANTEL MEDICAL CORP reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CANTEL MEDICAL CORP increased its bottom line by earning $1.05 versus $0.96 in the prior year. This year, the market expects an improvement in earnings ($1.15 versus $1.05).
  • 49.65% is the gross profit margin for CANTEL MEDICAL CORP which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CMN's net profit margin of 8.18% significantly trails the industry average.
  • Compared to its closing price of one year ago, CMN's share price has jumped by 46.58%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

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