Don't Miss Today's Strong And Under The Radar Stock: SPS Commerce (SPSC)

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

  • SPSC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.3 million.
  • SPSC is making at least a new 3-day high.
  • SPSC has a PE ratio of 35.
  • SPSC is mentioned 0.48 times per day on StockTwits.
  • SPSC has not yet been mentioned on StockTwits today.
  • SPSC is currently in the upper 20% of its 1-year range.
  • SPSC is in the upper 35% of its 20-day range.
  • SPSC is in the upper 45% of its 5-day range.
  • SPSC 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in SPSC with the Ticky from Trade-Ideas. See the FREE profile for SPSC NOW at Trade-Ideas

More details on SPSC:

SPS Commerce, Inc. provides cloud-based supply chain management solutions worldwide. It provides solutions through the SPS Commerce platform, a cloud-based product suite that improves the way suppliers, retailers, distributors, and other customers manage and fulfill orders. SPSC has a PE ratio of 35. Currently there are 4 analysts that rate SPS Commerce a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for SPS Commerce has been 76,600 shares per day over the past 30 days. SPS has a market cap of $1.1 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.91 and a short float of 3.9% with 6.64 days to cover. Shares are up 17.6% year-to-date as of the close of trading on Thursday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates SPS Commerce as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.8%. Since the same quarter one year prior, revenues rose by 27.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SPSC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 6.04, which clearly demonstrates the ability to cover short-term cash needs.
  • 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. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, SPS COMMERCE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $3.06 million or 13.94% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

Dow, S&P 500 and Nasdaq Tumble After Trump Calls Off North Korea Summit

Dow, S&P 500 and Nasdaq Tumble After Trump Calls Off North Korea Summit

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

3 Must Reads on the Market From TheStreet's Top Columnists

3 Must Reads on the Market From TheStreet's Top Columnists

Automakers Slump as Trump Tariffs Threaten Both Manufacturers and Consumers

Automakers Slump as Trump Tariffs Threaten Both Manufacturers and Consumers

Jim Cramer: Does Saudi Arabia Think Oil Prices Are Too High?

Jim Cramer: Does Saudi Arabia Think Oil Prices Are Too High?