Adobe Systems (ADBE) Highlighted As Momo Momentum Stock
Trade-Ideas LLC identified
(
) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Adobe Systems as such a stock due to the following factors:
- ADBE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $182.0 million.
- ADBE has a PE ratio of 55.
- ADBE is currently in the upper 30% of its 1-year range.
- ADBE is in the upper 25% of its 20-day range.
- ADBE is in the upper 35% of its 5-day range.
- ADBE is currently trading above yesterday's high.
- ADBE has experienced a gap between today's open and yesterday's close of 0.5%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.
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More details on ADBE:
Adobe Systems Incorporated operates as a diversified software company worldwide. Its Digital Media segment provides tools and solutions that enable individuals, small and medium businesses, and enterprises to create, publish, promote, and monetize their digital content. ADBE has a PE ratio of 55. Currently there are 10 analysts that rate Adobe Systems a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Adobe Systems has been 2.4 million shares per day over the past 30 days. Adobe Systems has a market cap of $48.9 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.27 and a short float of 0.9% with 2.49 days to cover. Shares are up 3.6% year-to-date as of the close of trading on Monday.
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Analysis:
rates Adobe Systems as a
. 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, impressive record of earnings per share growth, 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:
- The revenue growth came in higher than the industry average of 0.7%. Since the same quarter one year prior, revenues rose by 20.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ADBE's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ADBE has a quick ratio of 2.09, which demonstrates the ability of the company to cover short-term liquidity needs.
- ADOBE SYSTEMS INC 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 two years. We feel that this trend should continue. During the past fiscal year, ADOBE SYSTEMS INC increased its bottom line by earning $1.24 versus $0.52 in the prior year. This year, the market expects an improvement in earnings ($2.87 versus $1.24).
- The gross profit margin for ADOBE SYSTEMS INC is currently very high, coming in at 90.23%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.44% is above that of the industry average.
- Net operating cash flow has slightly increased to $488.72 million or 3.65% when compared to the same quarter last year. Despite an increase in cash flow, ADOBE SYSTEMS INC's cash flow growth rate is still lower than the industry average growth rate of 22.08%.
- You can view the full Adobe Systems Ratings Report.
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