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

  • IBP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.6 million.
  • IBP is making at least a new 3-day high.
  • IBP has a PE ratio of 41.
  • IBP is mentioned 0.97 times per day on StockTwits.
  • IBP has not yet been mentioned on StockTwits today.
  • IBP is currently in the upper 20% of its 1-year range.
  • IBP is in the upper 35% of its 20-day range.
  • IBP is in the upper 45% of its 5-day range.
  • IBP 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 IBP:

Installed Building Products, Inc., together with its wholly owned subsidiaries, primarily engages in the installation of insulation, garage doors, rain gutters, shower doors, closet shelving and mirrors, and other products in the continental United States. IBP has a PE ratio of 41. Currently there are 4 analysts that rate Installed Building Products a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Installed Building Products has been 87,500 shares per day over the past 30 days. Installed Building has a market cap of $756.3 million and is part of the industrial goods sector and materials & construction industry. Shares are up 35.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Installed Building Products as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and notable return on equity. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.6%. Since the same quarter one year prior, revenues rose by 22.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • INSTALLED BLDG PRODUCTS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, INSTALLED BLDG PRODUCTS INC increased its bottom line by earning $0.44 versus $0.08 in the prior year. This year, the market expects an improvement in earnings ($1.02 versus $0.44).
  • Powered by its strong earnings growth of 300.00% and other important driving factors, this stock has surged by 90.83% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Household Durables industry average, but is greater than that of the S&P 500. The net income increased by 233.0% when compared to the same quarter one year prior, rising from $0.37 million to $1.24 million.
  • The gross profit margin for INSTALLED BLDG PRODUCTS INC is currently lower than what is desirable, coming in at 28.95%. Regardless of IBP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, IBP's net profit margin of 0.95% compares favorably to the industry average.

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