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 "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified TE Connectivity as such a stock due to the following factors:
- TEL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $123.6 million.
- TEL has traded 2.2 million shares today.
- TEL traded in a range 209.6% of the normal price range with a price range of $1.99.
- TEL traded below its daily resistance level (quality: 234 days, meaning that the stock is crossing a resistance level set by the last 234 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on TEL:
TE Connectivity Ltd., together with its subsidiaries, designs and manufactures products that connect power, data, and signal automotive, energy, industrial, broadband communications, consumer devices, aerospace and defense, and healthcare industries. The stock currently has a dividend yield of 2%. TEL has a PE ratio of 16.2. Currently there are 6 analysts that rate TE Connectivity a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for TE Connectivity has been 1.7 million shares per day over the past 30 days. TE Connectivity has a market cap of $24.1 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.53 and a short float of 0.8% with 1.11 days to cover. Shares are up 5% year-to-date as of the close of trading on Monday.
rates TE Connectivity as a
. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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.
- TE CONNECTIVITY LTD has improved earnings per share by 22.8% 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, TE CONNECTIVITY LTD increased its bottom line by earning $3.02 versus $2.70 in the prior year. This year, the market expects an improvement in earnings ($3.78 versus $3.02).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Electronic Equipment, Instruments & Components industry average. The net income increased by 20.3% when compared to the same quarter one year prior, going from $335.00 million to $403.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 5.7%. Since the same quarter one year prior, revenues slightly increased by 3.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.07, which illustrates the ability to avoid short-term cash problems.
- You can view the full TE Connectivity Ratings Report.