Stock To Watch: MaxLinear (MXL) In Perilous Reversal

Trade-Ideas LLC identified MaxLinear (MXL) as a "perilous reversal" (up big yesterday but down big today) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

MaxLinear

(

MXL

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified MaxLinear as such a stock due to the following factors:

  • MXL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.7 million.
  • MXL has traded 442,964 shares today.
  • MXL is down 3.1% today.
  • MXL was up 27.9% yesterday.

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More details on MXL:

MaxLinear, Inc. provides integrated, radio-frequency (RF) and mixed-signal circuits for broadband communication and data center, metro, and long-haul transport network applications worldwide. Currently there are 6 analysts that rate MaxLinear a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for MaxLinear has been 780,600 shares per day over the past 30 days. MaxLinear has a market cap of $700.6 million and is part of the technology sector and electronics industry. The stock has a beta of -0.16 and a short float of 9.7% with 2.11 days to cover. Shares are up 126.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates MaxLinear as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and growth in earnings per share. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:

  • MXL's very impressive revenue growth greatly exceeded the industry average of 12.7%. Since the same quarter one year prior, revenues leaped by 192.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 133.33% and other important driving factors, this stock has surged by 84.92% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The gross profit margin for MAXLINEAR INC is currently very high, coming in at 72.81%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MXL's net profit margin of 1.66% significantly trails the industry average.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, MAXLINEAR INC's return on equity significantly trails that of both the industry average and the S&P 500.

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