Trade-Ideas LLC identified

KLA-Tencor

(

KLAC

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified KLA-Tencor as such a stock due to the following factors:

  • KLAC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $61.6 million.
  • KLAC has traded 563,444 shares today.
  • KLAC traded in a range 211.7% of the normal price range with a price range of $1.61.
  • KLAC traded above its daily resistance level (quality: 460 days, meaning that the stock is crossing a resistance level set by the last 460 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on KLAC:

KLA-Tencor Corporation designs, manufactures, and markets process control and yield management solutions worldwide. The stock currently has a dividend yield of 2.9%. KLAC has a PE ratio of 21. Currently there are 3 analysts that rate KLA-Tencor a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for KLA-Tencor has been 1.7 million shares per day over the past 30 days. KLA-Tencor has a market cap of $11.0 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.73 and a short float of 1.5% with 1.98 days to cover. Shares are up 2.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates KLA-Tencor as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, solid stock price performance, compelling growth in net income and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 9.2%. Since the same quarter one year prior, revenues slightly increased by 5.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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. Although other factors naturally played a role, the company's strong earnings growth was key. 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, KLA-TENCOR CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 651.0% when compared to the same quarter one year prior, rising from $20.27 million to $152.21 million.
  • Net operating cash flow has significantly increased by 805.12% to $100.32 million when compared to the same quarter last year. In addition, KLA-TENCOR CORP has also vastly surpassed the industry average cash flow growth rate of -3.95%.

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