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

  • HDB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.3 million.
  • HDB has traded 197.671999999999997044142219237983226776123046875 options contracts today.
  • HDB is making at least a new 3-day high.
  • HDB has a PE ratio of 39.
  • HDB is mentioned 0.58 times per day on StockTwits.
  • HDB has not yet been mentioned on StockTwits today.
  • HDB is currently in the upper 20% of its 1-year range.
  • HDB is in the upper 35% of its 20-day range.
  • HDB is in the upper 45% of its 5-day range.
  • HDB 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 HDB:

HDFC Bank Limited provides a range of banking and financial services to individuals and businesses in India, Bahrain, Hong Kong, and Dubai. The company operates in Treasury, Retail Banking, Wholesale Banking, and Other Banking Business segments. The stock currently has a dividend yield of 0.6%. HDB has a PE ratio of 39. Currently there are 2 analysts that rate HDFC Bank a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for HDFC Bank has been 748,900 shares per day over the past 30 days. HDFC has a market cap of $52.6 billion and is part of the financial sector and banking industry. Shares are up 2.2% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates HDFC Bank as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, solid stock price performance, expanding profit margins and growth in earnings per share. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.0%. Since the same quarter one year prior, revenues rose by 18.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 15.9% when compared to the same quarter one year prior, going from $430.05 million to $498.30 million.
  • 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.
  • The gross profit margin for HDFC BANK LTD is rather high; currently it is at 54.39%. Regardless of HDB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HDB's net profit margin of 18.39% compares favorably to the industry average.
  • HDFC BANK LTD has improved earnings per share by 11.3% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, HDFC BANK LTD increased its bottom line by earning $2.10 versus $1.83 in the prior year. For the next year, the market is expecting a contraction of 31.7% in earnings ($1.44 versus $2.10).

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