Strong And Under The Radar Today: Waterstone Financial (WSBF)

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

  • WSBF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.7 million.
  • WSBF is making at least a new 3-day high.
  • WSBF has a PE ratio of 31.
  • WSBF is mentioned 0.77 times per day on StockTwits.
  • WSBF has not yet been mentioned on StockTwits today.
  • WSBF is currently in the upper 20% of its 1-year range.
  • WSBF is in the upper 35% of its 20-day range.
  • WSBF is in the upper 45% of its 5-day range.
  • WSBF 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 WSBF:

Waterstone Financial, Inc. operates as a bank holding company for WaterStone Bank SSB that provides various financial services to customers in southeastern Wisconsin. The company operates through two segments, Community Banking and Mortgage Banking. The stock currently has a dividend yield of 1.5%. WSBF has a PE ratio of 31.

The average volume for Waterstone Financial has been 164,800 shares per day over the past 30 days. Waterstone Financial has a market cap of $437.1 million and is part of the financial sector and banking industry. The stock has a beta of -0.52 and a short float of 3% with 7.26 days to cover. Shares are down 0.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Waterstone Financial as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, expanding profit margins, solid stock price performance and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.5%. Since the same quarter one year prior, revenues rose by 15.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving 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 Thrifts & Mortgage Finance industry. The net income increased by 60.2% when compared to the same quarter one year prior, rising from $1.88 million to $3.02 million.
  • The gross profit margin for WATERSTONE FINANCIAL INC is currently very high, coming in at 84.03%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, WSBF's net profit margin of 8.14% significantly trails the industry average.
  • 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.
  • WATERSTONE FINANCIAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, WATERSTONE FINANCIAL INC reported lower earnings of $0.37 versus $0.43 in the prior year.

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