Today's Strong And Under The Radar Stock: SolarWinds (SWI)

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

  • SWI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $40.0 million.
  • SWI has traded 859.104000000000041836756281554698944091796875 options contracts today.
  • SWI is making at least a new 3-day high.
  • SWI has a PE ratio of 5.
  • SWI is mentioned 0.84 times per day on StockTwits.
  • SWI has not yet been mentioned on StockTwits today.
  • SWI is currently in the upper 20% of its 1-year range.
  • SWI is in the upper 35% of its 20-day range.
  • SWI is in the upper 45% of its 5-day range.
  • SWI 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 SWI:

SolarWinds, Inc., together with its subsidiaries, designs, develops, markets, sells, and supports enterprise-class information technology (IT) and infrastructure management software to IT and DevOps professionals in various organizations worldwide. SWI has a PE ratio of 5. Currently there are no analysts that rate SolarWinds a buy, no analysts rate it a sell, and 10 rate it a hold.

The average volume for SolarWinds has been 1.1 million shares per day over the past 30 days. SolarWinds has a market cap of $4.2 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.35 and a short float of 1% with 0.92 days to cover. Shares are up 17.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates SolarWinds as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and notable return on equity. However, as a counter to these strengths, we find that the stock itself is trading at a premium valuation.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 16.7%. Since the same quarter one year prior, revenues rose by 16.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • SOLARWINDS INC has improved earnings per share by 12.5% in the most recent quarter compared to the same quarter a year ago. 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, SOLARWINDS INC reported lower earnings of $1.03 versus $1.18 in the prior year. This year, the market expects an improvement in earnings ($2.10 versus $1.03).
  • The gross profit margin for SOLARWINDS INC is currently very high, coming in at 96.79%. Regardless of SWI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 20.52% trails the industry average.

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