Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) 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 Broadcom Corporation as such a stock due to the following factors:
- BRCM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $226.0 million.
- BRCM has traded 1.8 million shares today.
- BRCM is trading at 4.43 times the normal volume for the stock at this time of day.
- BRCM 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 BRCM:
Broadcom Corporation provides semiconductor solutions for wired and wireless communications. Its products offer voice, video, data, and multimedia connectivity in the home, office, and mobile environments. The stock currently has a dividend yield of 1.5%. BRCM has a PE ratio of 33.0. Currently there are 20 analysts that rate Broadcom Corporation a buy, 1 analyst rates it a sell, and 11 rate it a hold.
The average volume for Broadcom Corporation has been 8.0 million shares per day over the past 30 days. Broadcom has a market cap of $14.9 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.77 and a short float of 2.4% with 1.63 days to cover. Shares are down 3.2% year-to-date as of the close of trading on Thursday.
rates Broadcom Corporation as a
. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- 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 43.6% when compared to the same quarter one year prior, rising from $220.00 million to $316.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 5.0%. Since the same quarter one year prior, revenues slightly increased by 0.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- BROADCOM CORP has improved earnings per share by 44.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BROADCOM CORP reported lower earnings of $1.24 versus $1.64 in the prior year. This year, the market expects an improvement in earnings ($2.69 versus $1.24).
- BRCM has underperformed the S&P 500 Index, declining 14.31% from its price level of one year ago. 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 could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, BROADCOM CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full Broadcom Corporation Ratings Report.