Today's Strong And Under The Radar Stock: Natus Medical (BABY)

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

  • BABY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.7 million.
  • BABY is making at least a new 3-day high.
  • BABY has a PE ratio of 4.
  • BABY is mentioned 1.48 times per day on StockTwits.
  • BABY has not yet been mentioned on StockTwits today.
  • BABY is currently in the upper 20% of its 1-year range.
  • BABY is in the upper 35% of its 20-day range.
  • BABY is in the upper 45% of its 5-day range.
  • BABY 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 BABY:

Natus Medical Incorporated designs, manufactures, and markets newborn care and neurology healthcare products and services worldwide. BABY has a PE ratio of 4. Currently there are 3 analysts that rate Natus Medical a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Natus Medical has been 244,000 shares per day over the past 30 days. Natus Medical has a market cap of $1.4 billion and is part of the health care sector and health services industry. The stock has a beta of 0.21 and a short float of 6.3% with 8.01 days to cover. Shares are up 17.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Natus Medical as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • NATUS MEDICAL INC has improved earnings per share by 23.8% 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 two years. We feel that this trend should continue. During the past fiscal year, NATUS MEDICAL INC increased its bottom line by earning $1.00 versus $0.74 in the prior year. This year, the market expects an improvement in earnings ($1.49 versus $1.00).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Health Care Equipment & Supplies industry average. The net income increased by 27.3% when compared to the same quarter one year prior, rising from $6.76 million to $8.60 million.
  • BABY's revenue growth trails the industry average of 21.8%. Since the same quarter one year prior, revenues slightly increased by 4.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • BABY 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. To add to this, BABY has a quick ratio of 2.09, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly increased by 142.99% to $13.81 million when compared to the same quarter last year. In addition, NATUS MEDICAL INC has also vastly surpassed the industry average cash flow growth rate of 5.81%.

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