Gildan Activewear (GIL) Is Today's Strong And Under The Radar Stock

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

  • GIL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.6 million.
  • GIL is making at least a new 3-day high.
  • GIL has a PE ratio of 31.
  • GIL is mentioned 1.87 times per day on StockTwits.
  • GIL has not yet been mentioned on StockTwits today.
  • GIL is currently in the upper 20% of its 1-year range.
  • GIL is in the upper 35% of its 20-day range.
  • GIL is in the upper 45% of its 5-day range.
  • GIL 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 GIL:

Gildan Activewear Inc. manufactures and sells apparel products in the United States, Canada, Europe, the Asia-Pacific, and Latin America. . It operates in two segments, Printwear and Branded Apparel. The stock currently has a dividend yield of 0.8%. GIL has a PE ratio of 31. Currently there are 11 analysts that rate Gildan Activewear a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Gildan Activewear has been 359,800 shares per day over the past 30 days. Gildan Activewear has a market cap of $7.8 billion and is part of the consumer goods sector and consumer non-durables industry. Shares are up 13.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Gildan Activewear as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • GIL's revenue growth has slightly outpaced the industry average of 9.4%. Since the same quarter one year prior, revenues rose by 16.0%. 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.
  • 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, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • GILDAN ACTIVEWEAR INC's earnings per share declined by 28.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GILDAN ACTIVEWEAR INC increased its bottom line by earning $1.46 versus $1.31 in the prior year. This year, the market expects an improvement in earnings ($1.53 versus $1.46).
  • Despite currently having a low debt-to-equity ratio of 0.32, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.45 is sturdy.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, GILDAN ACTIVEWEAR INC's return on equity is below that of both the industry average and the S&P 500.

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