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 Analog Devices as such a stock due to the following factors:
- ADI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $75.6 million.
- ADI has traded 2.0 million shares today.
- ADI traded in a range 234% of the normal price range with a price range of $1.69.
- ADI traded below its daily resistance level (quality: 47 days, meaning that the stock is crossing a resistance level set by the last 47 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 ADI:
Analog Devices, Inc. engages in the design, manufacture, and marketing of analog, mixed-signal, and digital signal processing integrated circuits (ICs) for use in industrial, automotive, consumer, and communication markets worldwide. The stock currently has a dividend yield of 2.7%. ADI has a PE ratio of 23.6. Currently there are 10 analysts that rate Analog Devices a buy, no analysts rate it a sell, and 8 rate it a hold.
The average volume for Analog Devices has been 1.8 million shares per day over the past 30 days. Analog Devices has a market cap of $15.4 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.15 and a short float of 1.7% with 4.54 days to cover. Shares are up 18.7% year to date as of the close of trading on Tuesday.
rates Analog Devices 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, good cash flow from operations, increase in stock price during the past year, increase in net income and expanding profit margins. 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:
- Although ADI's debt-to-equity ratio of 0.19 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 9.75, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 59.77% to $220.03 million when compared to the same quarter last year. In addition, ANALOG DEVICES has also vastly surpassed the industry average cash flow growth rate of -11.73%.
- 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 net income growth from the same quarter one year ago has exceeded that of the Semiconductors & Semiconductor Equipment industry average, but is less than that of the S&P 500. The net income increased by 3.8% when compared to the same quarter one year prior, going from $169.77 million to $176.24 million.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.3%. Since the same quarter one year prior, revenues slightly dropped by 1.3%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- You can view the full Analog Devices Ratings Report.