Don't Miss Today's Strong And Under The Radar Stock: CoStar Group (CSGP)

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

  • CSGP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.9 million.
  • CSGP is making at least a new 3-day high.
  • CSGP has a PE ratio of 223.
  • CSGP is mentioned 1.61 times per day on StockTwits.
  • CSGP has not yet been mentioned on StockTwits today.
  • CSGP is currently in the upper 20% of its 1-year range.
  • CSGP is in the upper 35% of its 20-day range.
  • CSGP is in the upper 45% of its 5-day range.
  • CSGP 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 CSGP:

CoStar Group, Inc. provides information, analytics, and online marketplaces services to the commercial real estate industry in the United States, Canada, the United Kingdom, and France. CSGP has a PE ratio of 223. Currently there are 7 analysts that rate CoStar Group a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for CoStar Group has been 172,900 shares per day over the past 30 days. CoStar Group has a market cap of $6.7 billion and is part of the financial sector and real estate industry. The stock has a beta of 1.35 and a short float of 4.3% with 8.00 days to cover. Shares are up 12.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates CoStar Group as a buy. 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, good cash flow from operations, 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 5.8%. Since the same quarter one year prior, revenues rose by 33.5%. 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.
  • Although CSGP's debt-to-equity ratio of 0.25 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 4.33, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 560.24% to $30.17 million when compared to the same quarter last year. In addition, COSTAR GROUP INC has also vastly surpassed the industry average cash flow growth rate of 41.34%.
  • The gross profit margin for COSTAR GROUP INC is currently very high, coming in at 79.04%. 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 -3.85% is in-line with the industry average.
  • Compared to its closing price of one year ago, CSGP's share price has jumped by 31.52%, 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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