Today's Strong And Under The Radar Stock: LendingTree (TREE)

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

  • TREE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.2 million.
  • TREE is making at least a new 3-day high.
  • TREE has a PE ratio of 7.
  • TREE is mentioned 0.77 times per day on StockTwits.
  • TREE has not yet been mentioned on StockTwits today.
  • TREE is currently in the upper 20% of its 1-year range.
  • TREE is in the upper 35% of its 20-day range.
  • TREE is in the upper 45% of its 5-day range.
  • TREE 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 TREE:

LendingTree, Inc., through its subsidiaries, operates an online loan marketplace for consumers seeking an array of loan types and other credit-based offerings in the United States. The company operates in four segments: Lending, Auto, Education, and Home Services. TREE has a PE ratio of 7. Currently there are 2 analysts that rate LendingTree a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for LendingTree has been 155,500 shares per day over the past 30 days. LendingTree has a market cap of $741.9 million and is part of the financial sector and real estate industry. The stock has a beta of 1.66 and a short float of 10.3% with 4.05 days to cover. Shares are up 34% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates LendingTree as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, good cash flow from operations, impressive record of earnings per share growth and expanding profit margins. 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:

  • The revenue growth greatly exceeded the industry average of 9.0%. Since the same quarter one year prior, revenues rose by 27.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Thrifts & Mortgage Finance industry. The net income increased by 180.9% when compared to the same quarter one year prior, rising from -$6.41 million to $5.19 million.
  • Net operating cash flow has significantly increased by 5573.68% to $5.20 million when compared to the same quarter last year. In addition, LENDINGTREE INC has also vastly surpassed the industry average cash flow growth rate of -231.74%.
  • LENDINGTREE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, LENDINGTREE INC's EPS of -$0.06 remained unchanged from the prior years' EPS of -$0.06. This year, the market expects an improvement in earnings ($1.35 versus -$0.06).
  • The gross profit margin for LENDINGTREE INC is currently very high, coming in at 96.12%. 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 10.18% trails the industry average.

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