Stamps.com (STMP) Showing Signs Of Being Strong And Under The Radar

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

  • STMP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.8 million.
  • STMP is making at least a new 3-day high.
  • STMP has a PE ratio of 39.
  • STMP is mentioned 2.00 times per day on StockTwits.
  • STMP has not yet been mentioned on StockTwits today.
  • STMP is currently in the upper 20% of its 1-year range.
  • STMP is in the upper 35% of its 20-day range.
  • STMP is in the upper 45% of its 5-day range.
  • STMP 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in STMP with the Ticky from Trade-Ideas. See the FREE profile for STMP NOW at Trade-Ideas

More details on STMP:

Stamps.com Inc. provides Internet-based postage solutions in the United States. STMP has a PE ratio of 39. Currently there are 2 analysts that rate Stamps.com a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Stamps.com has been 173,300 shares per day over the past 30 days. Stamps.com has a market cap of $1.1 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.67 and a short float of 2.8% with 3.25 days to cover. Shares are up 45.3% year-to-date as of the close of trading on Tuesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Stamps.com as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.8%. Since the same quarter one year prior, revenues rose by 32.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • STMP has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.42, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for STAMPS.COM INC is currently very high, coming in at 82.32%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -2.20% is in-line with the industry average.
  • 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 Internet Software & Services industry. The net income has significantly decreased by 113.2% when compared to the same quarter one year ago, falling from $7.33 million to -$0.97 million.
  • Net operating cash flow has declined marginally to $17.10 million or 7.44% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

If you liked this article you might like

Nucor, Henry Schein, Kemet, Splunk: 'Mad Money' Lightning Round

Nucor, Henry Schein, Kemet, Splunk: 'Mad Money' Lightning Round

Give Thanks for This Week: Cramer's 'Mad Money' Recap (Tuesday 11/21/17)

Give Thanks for This Week: Cramer's 'Mad Money' Recap (Tuesday 11/21/17)

Markets Get Back to Business as Usual

Markets Get Back to Business as Usual

FANG Stocks Only Outperform in Odd Years: Here Are 18 Alternative Picks for 2018

FANG Stocks Only Outperform in Odd Years: Here Are 18 Alternative Picks for 2018

Stock Picking Is Getting Tough

Stock Picking Is Getting Tough