Strong And Under The Radar Today: Merit Medical Systems (MMSI)

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

  • MMSI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.4 million.
  • MMSI is making at least a new 3-day high.
  • MMSI has a PE ratio of 35.
  • MMSI is mentioned 1.48 times per day on StockTwits.
  • MMSI has not yet been mentioned on StockTwits today.
  • MMSI is currently in the upper 20% of its 1-year range.
  • MMSI is in the upper 35% of its 20-day range.
  • MMSI is in the upper 45% of its 5-day range.
  • MMSI 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 MMSI:

Merit Medical Systems, Inc. designs, develops, manufactures, and markets medical devices for interventional and diagnostic procedures worldwide. MMSI has a PE ratio of 35. Currently there are 4 analysts that rate Merit Medical Systems a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Merit Medical Systems has been 306,000 shares per day over the past 30 days. Merit Medical Systems has a market cap of $902.6 million and is part of the health care sector and health services industry. The stock has a beta of 1.87 and a short float of 3.5% with 4.19 days to cover. Shares are up 18.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Merit Medical Systems as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 71.42% and other important driving factors, this stock has surged by 46.53% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • MERIT MEDICAL SYSTEMS INC 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 two years. We feel that this trend should continue. During the past fiscal year, MERIT MEDICAL SYSTEMS INC increased its bottom line by earning $0.54 versus $0.39 in the prior year. This year, the market expects an improvement in earnings ($0.88 versus $0.54).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 83.3% when compared to the same quarter one year prior, rising from $2.82 million to $5.17 million.
  • MMSI's revenue growth trails the industry average of 22.6%. Since the same quarter one year prior, revenues slightly increased by 8.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.48, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.21, which illustrates the ability to avoid short-term cash problems.

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