NEW YORK (TheStreet) -- Monday was a very strong day for the stock market. A lot of our stocks did well, and I want to show you some interesting patterns here.
Advanced Micro Devices (AMD) over the course of the last few months has formed an ascending wedge within what looks like a longer-term rising channel. The stock is at the bottom of this channel, so there's lots of room to run. Mid-channel would be $5.75, and the channel top points to $7. On Monday, it was up 27 cents, or 6%, to $4.64 on nearly 73 million shares. That's the biggest volume in a while. If it pushes up through resistance right above current levels, it may very well get to mid-channel quickly.
BioDelivery Sciences International (BDSI), a recent swing trade pick of ours, has been acting great, up another 22 cents to $14.24 on Monday. After the recent pop and breakout and pullback, it snapped right back, and the stock is forming an ascending wedge. I'm looking for $16 on this stock, which is the top of the channel.
"We rate ADVANCED MICRO DEVICES (AMD) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and generally higher debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 2.9%. Since the same quarter one year prior, revenues rose by 28.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ADVANCED MICRO DEVICES reported significant earnings per share improvement 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ADVANCED MICRO DEVICES continued to lose money by earning -$0.11 versus -$1.59 in the prior year. This year, the market expects an improvement in earnings ($0.17 versus -$0.11).
- 38.44% is the gross profit margin for ADVANCED MICRO DEVICES which we consider to be strong. Regardless of AMD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AMD's net profit margin of -1.43% significantly underperformed when compared to the industry average.
- The debt-to-equity ratio is very high at 4.18 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, AMD's quick ratio is somewhat strong at 1.26, demonstrating the ability to handle short-term liquidity needs.
- Net operating cash flow has decreased to -$204.00 million or 31.61% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: AMD Ratings Report