Today's Roof Leaker Stock Is ASML (ASML)
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.
Trade-Ideas LLC identified
(
) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified ASML as such a stock due to the following factors:
- ASML has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $100.1 million.
- ASML has traded 775,442 shares today.
- ASML is trading at 7.13 times the normal volume for the stock at this time of day.
- ASML crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in ASML with the Ticky from Trade-Ideas. See the FREE profile for ASML NOW at Trade-Ideas
More details on ASML:
ASML Holding N.V. engages in the development, production, marketing, sale, and servicing of advanced semiconductor equipment systems with a focus on lithography related systems worldwide. The stock currently has a dividend yield of 0.6%. Currently there are 5 analysts that rate ASML a buy, 1 analyst rates it a sell, and 3 rate it a hold.
The average volume for ASML has been 754,500 shares per day over the past 30 days. ASML has a market cap of $47.8 billion and is part of the technology sector and electronics industry. Shares are down 3% year-to-date as of the close of trading on Wednesday.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.
Analysis:
rates ASML 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, notable return on equity and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- ASML's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.41, which illustrates the ability to avoid short-term cash problems.
- 48.05% is the gross profit margin for ASML HOLDING NV which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 20.39% trails the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market on the basis of return on equity, ASML HOLDING NV has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- ASML HOLDING NV 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, ASML HOLDING NV increased its bottom line by earning $3.27 versus $3.21 in the prior year. This year, the market expects an improvement in earnings ($3.87 versus $3.27).
- The revenue fell significantly faster than the industry average of 10.5%. Since the same quarter one year prior, revenues fell by 40.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full ASML Ratings Report.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.
null