Trade-Ideas LLC identified

Applied Micro Circuits

(

AMCC

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Applied Micro Circuits as such a stock due to the following factors:

  • AMCC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.7 million.
  • AMCC has traded 85,789 shares today.
  • AMCC is trading at 2.77 times the normal volume for the stock at this time of day.
  • AMCC is trading at a new high 3.04% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on AMCC:

Applied Micro Circuits Corporation provides silicon solutions for next-generation cloud infrastructure and data centers; and connectivity products for edge, metro, and long haul communications equipment in the United States and internationally. Currently there are 2 analysts that rate Applied Micro Circuits a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Applied Micro Circuits has been 1.1 million shares per day over the past 30 days. Applied Micro Circuits has a market cap of $463.9 million and is part of the technology sector and electronics industry. The stock has a beta of 1.78 and a short float of 21% with 20.86 days to cover. Shares are down 9.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Applied Micro Circuits as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, APPLIED MICRO CIRCUITS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • AMCC's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 30.91%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • AMCC, with its decline in revenue, underperformed when compared the industry average of 11.5%. Since the same quarter one year prior, revenues fell by 24.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for APPLIED MICRO CIRCUITS CORP is rather high; currently it is at 60.42%. Regardless of AMCC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AMCC's net profit margin of -19.58% significantly underperformed when compared to the industry average.
  • APPLIED MICRO CIRCUITS CORP has improved earnings per share by 47.0% in the most recent quarter compared to 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, APPLIED MICRO CIRCUITS CORP reported poor results of -$0.66 versus -$0.10 in the prior year. This year, the market expects an improvement in earnings (-$0.10 versus -$0.66).

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