Trade-Ideas: Maxim Integrated Products (MXIM) Is Today's "Water-Logged And Getting Wetter" Stock
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 Maxim Integrated Products as such a stock due to the following factors:
- MXIM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $81.1 million.
- MXIM has traded 1.3 million shares today.
- MXIM traded in a range 206.5% of the normal price range with a price range of $1.25.
- MXIM traded below its daily resistance level (quality: 25 days, meaning that the stock is crossing a resistance level set by the last 25 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 MXIM:
Maxim Integrated Products, Inc. designs, develops, manufactures, and markets various linear and mixed-signal integrated circuits worldwide. The company also provides a range of high-frequency process technologies and capabilities for use in custom designs. The stock currently has a dividend yield of 3.1%. MXIM has a PE ratio of 44.0. Currently there are 7 analysts that rate Maxim Integrated Products a buy, 2 analysts rate it a sell, and 9 rate it a hold.
The average volume for Maxim Integrated Products has been 2.4 million shares per day over the past 30 days. Maxim Integrated has a market cap of $10.2 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.76 and a short float of 3% with 2.35 days to cover. Shares are up 11.3% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates Maxim Integrated Products 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 increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
Highlights from the ratings report include:
- The current debt-to-equity ratio, 0.45, 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 4.90, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for MAXIM INTEGRATED PRODUCTS is rather high; currently it is at 68.88%. 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 -12.70% is in-line with the industry average.
- MXIM, with its decline in revenue, underperformed when compared the industry average of 10.5%. Since the same quarter one year prior, revenues slightly dropped by 8.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, MAXIM INTEGRATED PRODUCTS's return on equity is below that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $172.86 million or 26.26% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, MAXIM INTEGRATED PRODUCTS has marginally lower results.
- You can view the full Maxim Integrated Products Ratings Report.
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