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 or Stephanie Link.
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 Altera as such a stock due to the following factors:
- ALTR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $77.9 million.
- ALTR has traded 1.3 million shares today.
- ALTR traded in a range 202.3% of the normal price range with a price range of $1.40.
- ALTR traded below its daily resistance level (quality: 118 days, meaning that the stock is crossing a resistance level set by the last 118 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 ALTR:
Altera Corporation, a semiconductor company, designs, manufactures, and markets programmable logic devices (PLD), HardCopy application-specific integrated circuit (ASIC) devices, pre-defined design building blocks, and proprietary development software. The stock currently has a dividend yield of 1.6%. ALTR has a PE ratio of 23.9. Currently there are 10 analysts that rate Altera a buy, no analysts rate it a sell, and 9 rate it a hold.
The average volume for Altera has been 3.0 million shares per day over the past 30 days. Altera has a market cap of $11.9 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.35 and a short float of 2% with 2.67 days to cover. Shares are up 8.6% year to date as of the close of trading on Friday.
rates Altera 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, increase in stock price during the past year, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
Highlights from the ratings report include:
- ALTR'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 this, the company maintains a quick ratio of 5.43, which clearly demonstrates the ability to cover short-term cash needs.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The gross profit margin for ALTERA CORP is currently very high, coming in at 70.38%. Regardless of ALTR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ALTR's net profit margin of 24.06% compares favorably to the industry average.
- ALTR, with its decline in revenue, slightly underperformed the industry average of 8.2%. Since the same quarter one year prior, revenues slightly dropped by 9.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, ALTERA CORP's return on equity exceeds that of both the industry average and the S&P 500.
- You can view the full Altera Ratings Report.