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

  • DEG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.5 million.
  • DEG is making at least a new 3-day high.
  • DEG has a PE ratio of 8.
  • DEG is mentioned 1.03 times per day on StockTwits.
  • DEG has not yet been mentioned on StockTwits today.
  • DEG is currently in the upper 20% of its 1-year range.
  • DEG is in the upper 35% of its 20-day range.
  • DEG is in the upper 45% of its 5-day range.
  • DEG 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 DEG:

Etablissements Delhaize Freres et Cie 'Le Lion' (Groupe Delhaize) Societe Anonyme, together with its subsidiaries, operates food supermarkets. It also operates other store formats, including proximity, cash and carry, and specialty stores. The stock currently has a dividend yield of 1.3%. DEG has a PE ratio of 8. Currently there are 2 analysts that rate Delhaize Group a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Delhaize Group has been 164,300 shares per day over the past 30 days. Delhaize Group has a market cap of $9.6 billion and is part of the services sector and retail industry. Shares are up 28.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Delhaize Group as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. 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 current debt-to-equity ratio, 0.50, 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 0.75 is somewhat weak and could be cause for future problems.
  • DELHAIZE GROUP - ETS DLHZ FR has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, DELHAIZE GROUP - ETS DLHZ FR reported lower earnings of $0.56 versus $0.91 in the prior year. This year, the market expects an improvement in earnings ($3.01 versus $0.56).
  • DEG, with its decline in revenue, underperformed when compared the industry average of 0.2%. Since the same quarter one year prior, revenues fell by 17.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Food & Staples Retailing industry. The net income has significantly decreased by 151.1% when compared to the same quarter one year ago, falling from $145.13 million to -$74.14 million.

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