Today's Strong And Under The Radar Stock Is Emergent BioSolutions (EBS)

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

  • EBS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.9 million.
  • EBS is making at least a new 3-day high.
  • EBS has a PE ratio of 38.
  • EBS is mentioned 1.84 times per day on StockTwits.
  • EBS has not yet been mentioned on StockTwits today.
  • EBS is currently in the upper 20% of its 1-year range.
  • EBS is in the upper 35% of its 20-day range.
  • EBS is in the upper 45% of its 5-day range.
  • EBS 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 EBS:

Emergent BioSolutions Inc., a specialty pharmaceutical company, develops, manufactures, and commercializes specialized products for use in biodefense and commercial markets in the United States and internationally. EBS has a PE ratio of 38. Currently there are 2 analysts that rate Emergent BioSolutions a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Emergent BioSolutions has been 249,700 shares per day over the past 30 days. Emergent BioSolutions has a market cap of $1.3 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.94 and a short float of 12% with 15.38 days to cover. Shares are up 22.1% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Emergent BioSolutions as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, robust revenue growth, reasonable valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, EBS's share price has jumped by 40.95%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, EBS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 22.2%. Since the same quarter one year prior, revenues rose by 18.1%. 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.
  • The gross profit margin for EMERGENT BIOSOLUTIONS INC is currently very high, coming in at 86.55%. 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 -33.81% is in-line with the industry average.
  • Despite currently having a low debt-to-equity ratio of 0.47, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.71 is very high and demonstrates very strong liquidity.

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