eResearchTechnology (NASDAQ: ERES) provides technology and services to the pharmaceutical, biotechnology and medical device industries. The company streamlines the clinical trials process by enabling customers to automate the collection, analysis and distribution of data in all phases of clinical development. The firm's flagship product, EXPeRT, processes and interprets electrocardiogram data collected during trials, to insure cardiac safety. eResearchTechnology operates in the US and the UK.

The firm pleased investors late last month, when it reported Q4 EPS of ten cents and revenues of $28.9 million. Wall Street analysts had been looking for eight cents and $28.6 million. Management also guided Q1 EPS to 8-10 cents (nine cent Street view), Q1 revenues to $31-$33 million ($29.6M Street), FY08 EPS to 42-46 cents (41 cent Street) and FY08 revenues to $130-$137 million ($122.1M Street).

The stock popped through major moving average resistance on the news and has since been defining a bullish "flag" consolidation pattern. Stocks frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the issue with two "strong buys" and one "hold". Analysts see a 30% growth rate, through the next year. The stock's Price to Free Cash Flow ratio (22.29), Sales Growth rate (45.04%), EPS Growth rate (150.00%), Operating Margin (22.54%), Net Profit Margin (15.45%), Return on Assets (11.61%) and Return on Investment (14.54%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 84% of the outstanding shares. Over the past 52 weeks, ERES has traded between $7.37 and $12.49. A stop-loss of $9.90 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in the stock discussed above.