Trade-Ideas LLC identified

NXP Semiconductors

(

NXPI

) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified NXP Semiconductors as such a stock due to the following factors:

  • NXPI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $316.1 million.
  • NXPI has traded 2.7 million shares today.
  • NXPI is trading at 1.78 times the normal volume for the stock at this time of day.
  • NXPI crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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 NXPI:

NXP Semiconductors N.V., a semiconductor company, provides high performance mixed signal and standard product solutions for radio frequency (RF), analog, power management, interface, security, and digital processing products worldwide. NXPI has a PE ratio of 47. Currently there are 12 analysts that rate NXP Semiconductors a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for NXP Semiconductors has been 3.9 million shares per day over the past 30 days. NXP Semiconductors has a market cap of $20.2 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.04 and a short float of 6.5% with 4.76 days to cover. Shares are up 19.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates NXP Semiconductors as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, growth in earnings per share, increase 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 11.3%. Since the same quarter one year prior, revenues rose by 11.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • NXP SEMICONDUCTORS NV reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, NXP SEMICONDUCTORS NV increased its bottom line by earning $2.17 versus $1.34 in the prior year. This year, the market expects an improvement in earnings ($5.85 versus $2.17).
  • 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 88.7% when compared to the same quarter one year prior, rising from $159.00 million to $300.00 million.
  • 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, NXP SEMICONDUCTORS NV's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $351.00 million or 45.04% when compared to the same quarter last year. In addition, NXP SEMICONDUCTORS NV has also vastly surpassed the industry average cash flow growth rate of -23.33%.

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