Qualcomm (QCOM) Falls Further As It's Water-Logged And Getting Wetter
Trade-Ideas LLC identified
(
) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Qualcomm as such a stock due to the following factors:
- QCOM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $486.4 million.
- QCOM has traded 12.1 million shares today.
- QCOM traded in a range 372.1% of the normal price range with a price range of $3.92.
- QCOM traded below its daily resistance level (quality: 36 days, meaning that the stock is crossing a resistance level set by the last 36 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on QCOM:
QUALCOMM Incorporated designs, develops, manufactures, and markets digital communications products and services in China, South Korea, Taiwan, and the United States. The stock currently has a dividend yield of 3.1%. QCOM has a PE ratio of 17. Currently there are 11 analysts that rate Qualcomm a buy, 1 analyst rates it a sell, and 10 rate it a hold.
The average volume for Qualcomm has been 11.6 million shares per day over the past 30 days. Qualcomm has a market cap of $95.6 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 1.43 and a short float of 1.8% with 3.24 days to cover. Shares are down 18.9% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Qualcomm as a
. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 3.83, which clearly demonstrates the ability to cover short-term cash needs.
- QUALCOMM INC's earnings per share declined by 44.3% in the most recent quarter compared to 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, QUALCOMM INC increased its bottom line by earning $4.40 versus $3.91 in the prior year. This year, the market expects an improvement in earnings ($4.61 versus $4.40).
- The gross profit margin for QUALCOMM INC is rather high; currently it is at 63.08%. Regardless of QCOM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, QCOM's net profit margin of 20.30% compares favorably to the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Communications Equipment industry. The net income has significantly decreased by 47.1% when compared to the same quarter one year ago, falling from $2,238.00 million to $1,184.00 million.
- Net operating cash flow has decreased to $2,116.00 million or 20.83% 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 Qualcomm Ratings Report.
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