Today's Water-Logged And Getting Wetter Stock: KLA-Tencor (KLAC)
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 "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 KLA-Tencor as such a stock due to the following factors:
- KLAC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $68.9 million.
- KLAC has traded 556,382 shares today.
- KLAC traded in a range 228.1% of the normal price range with a price range of $2.38.
- KLAC traded below its daily resistance level (quality: 11 days, meaning that the stock is crossing a resistance level set by the last 11 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 KLAC:
KLA-Tencor Corporation designs, manufactures, and markets process control and yield management solutions worldwide. The stock currently has a dividend yield of 3.2%. KLAC has a PE ratio of 24.9. Currently there are 5 analysts that rate KLA-Tencor a buy, 1 analyst rates it a sell, and 7 rate it a hold.
The average volume for KLA-Tencor has been 1.4 million shares per day over the past 30 days. KLA-Tencor has a market cap of $10.3 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.67 and a short float of 2.9% with 3.76 days to cover. Shares are down 10.4% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates KLA-Tencor as a
. The company's strengths can be seen in multiple areas, such as its notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and generally higher debt management risk.
Highlights from the ratings report include:
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, KLA-TENCOR CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for KLA-TENCOR CORP is rather high; currently it is at 60.92%. Regardless of KLAC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, KLAC's net profit margin of 2.99% is significantly lower than the industry average.
- Net operating cash flow has significantly decreased to $11.08 million or 90.38% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- 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 85.4% when compared to the same quarter one year ago, falling from $139.25 million to $20.27 million.
- You can view the full KLA-Tencor Ratings Report.
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