Don't Miss Today's Strong And Under The Radar Stock: Stewart Information Services (STC)

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

  • STC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.3 million.
  • STC is making at least a new 3-day high.
  • STC has a PE ratio of 3.
  • STC is mentioned 0.42 times per day on StockTwits.
  • STC has not yet been mentioned on StockTwits today.
  • STC is currently in the upper 20% of its 1-year range.
  • STC is in the upper 35% of its 20-day range.
  • STC is in the upper 45% of its 5-day range.
  • STC 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 STC:

Stewart Information Services Corporation provides title insurance and real estate services worldwide. The stock currently has a dividend yield of 0.7%. STC has a PE ratio of 3. Currently there are no analysts that rate Stewart Information Services a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Stewart Information Services has been 98,000 shares per day over the past 30 days. Stewart Information Services has a market cap of $875.8 million and is part of the financial sector and insurance industry. The stock has a beta of 1.17 and a short float of 2.1% with 4.39 days to cover. Shares are up 5.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Stewart Information Services as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 9.5%. Since the same quarter one year prior, revenues rose by 14.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • STC's debt-to-equity ratio is very low at 0.10 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Net operating cash flow has increased to -$26.87 million or 46.46% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 21.66%.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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. We feel, however, that the other strengths this company displays justify these higher price levels.
  • STEWART INFORMATION SERVICES's earnings per share improvement from the most recent quarter was slightly positive. 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, STEWART INFORMATION SERVICES reported lower earnings of $1.19 versus $2.59 in the prior year. This year, the market expects an improvement in earnings ($2.37 versus $1.19).

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