Qualcomm (QCOM) Is Today's Dead Cat Bounce Stock

Trade-Ideas LLC identified Qualcomm (QCOM) as a "dead cat bounce" (down big yesterday but up big today) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Qualcomm

(

QCOM

) as a "dead cat bounce" (down big yesterday but up big today) 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 $777.9 million.
  • QCOM has traded 1.3 million shares today.
  • QCOM is up 3.7% today.
  • QCOM was down 15.3% yesterday.

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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 2.03 days to cover. Shares are down 18.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Qualcomm as a

hold

. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The gross profit margin for QUALCOMM INC is rather high; currently it is at 64.70%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.46% is above that of the industry average.
  • Net operating cash flow has slightly increased to $1,684.00 million or 4.01% when compared to the same quarter last year. Despite an increase in cash flow, QUALCOMM INC's average is still marginally south of the industry average growth rate of 7.17%.
  • The share price of QUALCOMM INC has not done very well: it is down 21.86% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • 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 43.9% when compared to the same quarter one year ago, falling from $1,894.00 million to $1,062.00 million.

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