Matthews International Corporation (MATW) Is Today's Strong And Under The Radar Stock

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 Matthews International Corporation ( MATW) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Matthews International Corporation as such a stock due to the following factors:

  • MATW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.9 million.
  • MATW is making at least a new 3-day high.
  • MATW has a PE ratio of 35.
  • MATW is mentioned 0.39 times per day on StockTwits.
  • MATW has not yet been mentioned on StockTwits today.
  • MATW is currently in the upper 20% of its 1-year range.
  • MATW is in the upper 35% of its 20-day range.
  • MATW is in the upper 45% of its 5-day range.
  • MATW 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 MATW:

Matthews International Corporation designs, manufactures, and markets memorialization products and solutions for the cemetery and funeral home industries in the United States, Central and South America, Canada, Europe, Australia, and Asia. The stock currently has a dividend yield of 0.9%. MATW has a PE ratio of 35. Currently there are 2 analysts that rate Matthews International Corporation a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Matthews International Corporation has been 87,300 shares per day over the past 30 days. Matthews International has a market cap of $1.8 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.70 and a short float of 2.3% with 6.83 days to cover. Shares are up 11.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Matthews International Corporation as a buy. 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, good cash flow from operations, expanding profit margins and solid stock price performance. 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 greatly exceeded the industry average of 1.2%. Since the same quarter one year prior, revenues rose by 41.5%. 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 debt-to-equity ratio is somewhat low, currently at 0.96, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.48, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 295.41% to $44.82 million when compared to the same quarter last year. In addition, MATTHEWS INTL CORP has also vastly surpassed the industry average cash flow growth rate of -10.65%.
  • 41.26% is the gross profit margin for MATTHEWS INTL CORP which we consider to be strong. 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 2.74% trails the industry average.
  • Compared to its closing price of one year ago, MATW's share price has jumped by 35.65%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp 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 other strengths this company displays justify these higher price levels.

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