Broadcom (AVGO) Weak On High Volume Today
Trade-Ideas LLC identified
(
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Broadcom as such a stock due to the following factors:
- AVGO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $488.5 million.
- AVGO has traded 341,932 shares today.
- AVGO is trading at 2.10 times the normal volume for the stock at this time of day.
- AVGO is trading at a new low 3.00% below yesterday's close.
'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. 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 (or avoid losses by trimming weak positions). 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.
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More details on AVGO:
Broadcom Limited designs, develops, and supplies a range of analog and digital semiconductor connectivity solutions. The stock currently has a dividend yield of 1.3%. AVGO has a PE ratio of 1402. Currently there are 27 analysts that rate Broadcom a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Broadcom has been 2.7 million shares per day over the past 30 days. Broadcom has a market cap of $61.0 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.02 and a short float of 1.3% with 1.40 days to cover. Shares are up 6.2% year-to-date as of the close of trading on Friday.
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Analysis:
rates Broadcom 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
Highlights from the ratings report include:
- AVGO's very impressive revenue growth greatly exceeded the industry average of 5.8%. Since the same quarter one year prior, revenues leaped by 119.4%. 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.
- BROADCOM LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. 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, BROADCOM LTD increased its bottom line by earning $4.90 versus $1.16 in the prior year. This year, the market expects an improvement in earnings ($10.93 versus $4.90).
- AVGO's debt-to-equity ratio of 0.76 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.47 is sturdy.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, BROADCOM LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 444.8% when compared to the same quarter one year ago, falling from $344.00 million to -$1,186.00 million.
- You can view the full Broadcom Ratings Report.
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