US Ecology (ECOL) Showing Signs Of Being Strong And Under The Radar

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

  • ECOL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.3 million.
  • ECOL is making at least a new 3-day high.
  • ECOL has a PE ratio of 3.
  • ECOL is mentioned 0.87 times per day on StockTwits.
  • ECOL has not yet been mentioned on StockTwits today.
  • ECOL is currently in the upper 20% of its 1-year range.
  • ECOL is in the upper 35% of its 20-day range.
  • ECOL is in the upper 45% of its 5-day range.
  • ECOL 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 ECOL:

US Ecology, Inc., through its subsidiaries, provides environmental services to commercial and government entities in the United States. It operates in two segments, Environmental Services; and Field & Industrial Services. The stock currently has a dividend yield of 1.5%. ECOL has a PE ratio of 3. Currently there are 3 analysts that rate US Ecology a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for US Ecology has been 105,400 shares per day over the past 30 days. US Ecology has a market cap of $1.1 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.90 and a short float of 8.4% with 18.93 days to cover. Shares are up 21.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates US Ecology as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and reasonable valuation levels. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • ECOL's very impressive revenue growth greatly exceeded the industry average of 1.2%. Since the same quarter one year prior, revenues leaped by 156.1%. 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.
  • Net operating cash flow has significantly increased by 78.70% to $22.63 million when compared to the same quarter last year. In addition, US ECOLOGY INC has also vastly surpassed the industry average cash flow growth rate of -10.61%.
  • Despite the current debt-to-equity ratio of 1.50, it is still below the industry average, suggesting that this level of debt is acceptable within the Commercial Services & Supplies industry. Despite the fact that ECOL's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.67 is high and demonstrates strong liquidity.
  • US ECOLOGY INC's earnings per share declined by 37.2% 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, US ECOLOGY INC increased its bottom line by earning $1.76 versus $1.72 in the prior year. This year, the market expects an improvement in earnings ($1.81 versus $1.76).
  • 37.80% is the gross profit margin for US ECOLOGY INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, ECOL's net profit margin of 4.29% compares favorably to the industry average.

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