Strong And Under The Radar Today: QTS Realty (QTS)

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

  • QTS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.4 million.
  • QTS is making at least a new 3-day high.
  • QTS has a PE ratio of 75.
  • QTS is mentioned 1.65 times per day on StockTwits.
  • QTS has not yet been mentioned on StockTwits today.
  • QTS is currently in the upper 20% of its 1-year range.
  • QTS is in the upper 35% of its 20-day range.
  • QTS is in the upper 45% of its 5-day range.
  • QTS 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 QTS:

QTS Realty Trust, Inc. focuses on the ownership, development, and operation of carrier-neutral data centers in the United States. The company was founded in 2013 and is headquartered in Overland Park, Kansas. The stock currently has a dividend yield of 3.4%. QTS has a PE ratio of 75. Currently there are 6 analysts that rate QTS Realty a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for QTS Realty has been 291,600 shares per day over the past 30 days. QTS has a market cap of $1.3 billion and is part of the financial sector and real estate industry. Shares are up 11.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates QTS Realty as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and poor profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 8.5%. Since the same quarter one year prior, revenues rose by 25.4%. 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.
  • Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, QTS REALTY TRUST INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for QTS REALTY TRUST INC is rather low; currently it is at 16.91%. Regardless of QTS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, QTS's net profit margin of 6.64% is significantly lower than the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Real Estate Investment Trusts (REITs) industry average, but is greater than that of the S&P 500. The net income has decreased by 2.8% when compared to the same quarter one year ago, dropping from $4.20 million to $4.08 million.

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