IM, as shown in this chart above, has been stuck in a neutral or sideways trend the past 12 months, but notice the improvement in the On-Balance Volume (OBV) line beginning in March/April.
The rising OBV line tells the chartist that the volume of shares traded has been heavier on the days that IM closed higher on the day, indicating accumulation. Also you can see that the OBV line broke out to a new high last month.
Volume often precedes prices, so an upside breakout for IM could be coming soon. The last technical clue in this chart is that the slope of the 50-day Moving Average is now positive, telling us that on this time frame the trend is up.
This point and figure chart, above, of IM shows the sideways trend, but it also shows us clearly the breakout point. We see that $31 would be a new high, and it gives us an estimate of where IM could rally to: $36. Traders who buy the breakout at $31 should use an appropriate sell stop.
Separately, TheStreet Ratings team rates INGRAM MICRO INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
We rate INGRAM MICRO INC (IM) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly increased by 2296.77% to $567.95 million when compared to the same quarter last year. In addition, INGRAM MICRO INC has also vastly surpassed the industry average cash flow growth rate of 27.57%.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. 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.
- IM's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.94 is somewhat weak and could be cause for future problems.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.6%. Since the same quarter one year prior, revenues slightly dropped by 3.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- INGRAM MICRO INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, INGRAM MICRO INC reported lower earnings of $1.67 versus $1.98 in the prior year. This year, the market expects an improvement in earnings ($2.69 versus $1.67).
- You can view the full analysis from the report here: IM