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Storm The Castle Stock Of The Day: ASML (ASML)

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 or Stephanie Link.

Trade-Ideas LLC identified ASML (ASML) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified ASML as such a stock due to the following factors:

  • ASML has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $156.6 million.
  • ASML has traded 2.0 million shares today.
  • ASML is trading at 1.85 times the normal volume for the stock at this time of day.
  • ASML crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in ASML with the Ticky from Trade-Ideas. See the FREE profile for ASML NOW at Trade-Ideas

More details on ASML:

ASML Holding N.V. designs, manufactures, markets, and services semiconductor processing equipment used in the fabrication of intercircuits worldwide. The stock currently has a dividend yield of 0.8%. Currently there are 6 analysts that rate ASML a buy, 2 analysts rate it a sell, and 2 rate it a hold.

The average volume for ASML has been 1.2 million shares per day over the past 30 days. ASML has a market cap of $38.0 billion and is part of the technology sector and electronics industry. Shares are down 8.1% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates ASML 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, increase in stock price during the past year, expanding profit margins 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:

  • ASML's very impressive revenue growth greatly exceeded the industry average of 5.0%. Since the same quarter one year prior, revenues leaped by 78.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ASML's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful 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.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • 48.10% is the gross profit margin for ASML HOLDING NV which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 26.95% is above that of the industry average.
  • Net operating cash flow has significantly increased by 339.83% to $731.94 million when compared to the same quarter last year. In addition, ASML HOLDING NV has also vastly surpassed the industry average cash flow growth rate of -9.44%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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