Trade-Ideas LLC identified

NXP Semiconductors

(

NXPI

) as a weak on high 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 $310.0 million.
  • NXPI has traded 927,699 shares today.
  • NXPI is trading at 3.90 times the normal volume for the stock at this time of day.
  • NXPI is trading at a new low 5.01% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 15. Currently there are 15 analysts that rate NXP Semiconductors a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for NXP Semiconductors has been 4.1 million shares per day over the past 30 days. NXP Semiconductors has a market cap of $29.9 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.89 and a short float of 2.4% with 2.03 days to cover. Shares are down 5% year-to-date as of the close of trading on Friday.

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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 robust revenue growth, good cash flow from operations 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 ratings report include:

  • NXPI's very impressive revenue growth greatly exceeded the industry average of 5.8%. Since the same quarter one year prior, revenues leaped by 51.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $414.00 million or 12.50% when compared to the same quarter last year. In addition, NXP SEMICONDUCTORS NV has also modestly surpassed the industry average cash flow growth rate of 3.88%.
  • NXPI's debt-to-equity ratio of 0.80 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.94 is weak.
  • NXP SEMICONDUCTORS NV 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NXP SEMICONDUCTORS NV increased its bottom line by earning $5.82 versus $2.17 in the prior year. For the next year, the market is expecting a contraction of 0.8% in earnings ($5.77 versus $5.82).
  • The share price of NXP SEMICONDUCTORS NV has not done very well: it is down 15.53% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.

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