Barbarian At The Gate: Synopsys (SNPS)
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 Synopsys (SNPS) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Synopsys as such a stock due to the following factors:
- SNPS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.4 million.
- SNPS has traded 578,894 shares today.
- SNPS traded in a range 235% of the normal price range with a price range of $1.51.
- SNPS traded above its daily resistance level (quality: 48 days, meaning that the stock is crossing a resistance level set by the last 48 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.EXCLUSIVE OFFER: Get the inside scoop on opportunities in SNPS with the Ticky from Trade-Ideas. See the FREE profile for SNPS NOW at Trade-IdeasMore details on SNPS: Synopsys, Inc. provides electronic design automation (EDA) software products used to design integrated circuits (IC) and electronic systems primarily in the United States, Europe, Japan, and the rest of Asia Pacific. SNPS has a PE ratio of 24.5. Currently there are 5 analysts that rate Synopsys a buy, no analysts rate it a sell, and 1 rates it a hold.The average volume for Synopsys has been 728,700 shares per day over the past 30 days. Synopsys has a market cap of $5.9 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.62 and a short float of 0.7% with 1.86 days to cover. Shares are down 5.1% year-to-date as of the close of trading on Wednesday.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 Synopsys as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.6%. Since the same quarter one year prior, revenues slightly increased by 0.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- SNPS's debt-to-equity ratio is very low at 0.03 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 1.10, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has increased to -$73.89 million or 19.18% when compared to the same quarter last year. In addition, SYNOPSYS INC has also modestly surpassed the industry average cash flow growth rate of 9.53%.
- SYNOPSYS INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, SYNOPSYS INC increased its bottom line by earning $1.58 versus $1.22 in the prior year. This year, the market expects an improvement in earnings ($2.46 versus $1.58).
- You can view the full Synopsys Ratings Report.
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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