Trade-Ideas LLC identified

Linear Technology

(

LLTC

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Linear Technology as such a stock due to the following factors:

  • LLTC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $153.3 million.
  • LLTC has traded 810,822 shares today.
  • LLTC is down 3.7% today.
  • LLTC was up 28.9% yesterday.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in LLTC with the Ticky from Trade-Ideas. See the FREE profile for LLTC NOW at Trade-Ideas

More details on LLTC:

Linear Technology Corporation, together with its subsidiaries, designs, manufactures, and markets a line of analog integrated circuits worldwide. The stock currently has a dividend yield of 2.6%. LLTC has a PE ratio of 24. Currently there are 4 analysts that rate Linear Technology a buy, 5 analysts rate it a sell, and 6 rate it a hold.

The average volume for Linear Technology has been 1.9 million shares per day over the past 30 days. Linear Technology has a market cap of $11.6 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.95 and a short float of 4% with 4.10 days to cover. Shares are up 14.1% year-to-date as of the close of trading on Monday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Linear Technology as a

buy

. 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, expanding profit margins, solid stock price performance and notable return on equity. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • LLTC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 8.69, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has increased to $177.40 million or 15.78% when compared to the same quarter last year. In addition, LINEAR TECHNOLOGY CORP has also vastly surpassed the industry average cash flow growth rate of -59.36%.
  • The gross profit margin for LINEAR TECHNOLOGY CORP is currently very high, coming in at 79.69%. LLTC has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, LLTC's net profit margin of 35.55% significantly outperformed against the industry.
  • 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.
  • LLTC, with its decline in revenue, underperformed when compared the industry average of 14.8%. Since the same quarter one year prior, revenues slightly dropped by 2.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.