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

  • PKI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.5 million.
  • PKI is making at least a new 3-day high.
  • PKI has a PE ratio of 36.
  • PKI is mentioned 1.42 times per day on StockTwits.
  • PKI has not yet been mentioned on StockTwits today.
  • PKI is currently in the upper 20% of its 1-year range.
  • PKI is in the upper 35% of its 20-day range.
  • PKI is in the upper 45% of its 5-day range.
  • PKI 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 PKI:

PerkinElmer, Inc. provides products, services, and solutions to the diagnostics, research, environmental, industrial, and laboratory services markets worldwide. The company operates through two segments, Human Health and Environmental Health. The stock currently has a dividend yield of 0.5%. PKI has a PE ratio of 36. Currently there are 11 analysts that rate PerkinElmer a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for PerkinElmer has been 821,100 shares per day over the past 30 days. PerkinElmer has a market cap of $5.9 billion and is part of the health care sector and health services industry. The stock has a beta of -0.01 and a short float of 4.4% with 10.64 days to cover. Shares are up 20% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates PerkinElmer as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Life Sciences Tools & Services industry. The net income increased by 17.9% when compared to the same quarter one year prior, going from $34.22 million to $40.33 million.
  • The current debt-to-equity ratio, 0.49, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.06, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for PERKINELMER INC is rather high; currently it is at 51.00%. 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 7.65% trails the industry average.

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