Trade-Ideas LLC identified

Texas Instruments

(

TXN

) 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 Texas Instruments as such a stock due to the following factors:

  • TXN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $531.5 million.
  • TXN has traded 10.0 million shares today.
  • TXN is trading at 1.64 times the normal volume for the stock at this time of day.
  • TXN 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 TXN:

TheStreet Recommends

Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers worldwide. It operates through two segments, Analog and Embedded Processing. The stock currently has a dividend yield of 3%. TXN has a PE ratio of 18. Currently there are 10 analysts that rate Texas Instruments a buy, 1 analyst rates it a sell, and 17 rate it a hold.

The average volume for Texas Instruments has been 6.2 million shares per day over the past 30 days. Texas Instruments has a market cap of $51.4 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.34 and a short float of 2.7% with 2.83 days to cover. Shares are down 6.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Texas Instruments as a

buy

. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures, notable return on equity and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • TEXAS INSTRUMENTS INC has improved earnings per share by 5.3% 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, TEXAS INSTRUMENTS INC increased its bottom line by earning $2.82 versus $2.58 in the prior year. This year, the market expects an improvement in earnings ($2.95 versus $2.82).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry average. The net income increased by 1.3% when compared to the same quarter one year prior, going from $825.00 million to $836.00 million.
  • The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, TXN has a quick ratio of 1.72, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, TEXAS INSTRUMENTS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Net operating cash flow has increased to $1,430.00 million or 12.42% when compared to the same quarter last year. In addition, TEXAS INSTRUMENTS INC has also vastly surpassed the industry average cash flow growth rate of -74.67%.

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