Trade-Ideas LLC identified
) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Cavium as such a stock due to the following factors:
- CAVM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $59.0 million.
- CAVM has traded 564,086 shares today.
- CAVM traded in a range 289.3% of the normal price range with a price range of $4.20.
- CAVM traded above its daily resistance level (quality: 49 days, meaning that the stock is crossing a resistance level set by the last 49 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on CAVM:
Cavium, Inc. designs, develops, and markets semiconductor processors for intelligent and secure networks in the United States and internationally. Currently there are 7 analysts that rate Cavium a buy, no analysts rate it a sell, and 7 rate it a hold.
The average volume for Cavium has been 1.4 million shares per day over the past 30 days. Cavium has a market cap of $2.5 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.34 and a short float of 14.9% with 5.63 days to cover. Shares are down 33.5% year-to-date as of the close of trading on Tuesday.
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rates Cavium as a
. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- CAVM's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 31.75%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, CAVIUM INC's return on equity significantly trails that of both the industry average and the S&P 500.
- CAVIUM INC reported significant earnings per share improvement 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, CAVIUM INC reported poor results of -$0.31 versus -$0.29 in the prior year. This year, the market expects an improvement in earnings ($1.34 versus -$0.31).
- The gross profit margin for CAVIUM INC is currently very high, coming in at 77.93%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -3.76% is in-line with the industry average.
- Net operating cash flow has increased to $4.86 million or 39.35% when compared to the same quarter last year. In addition, CAVIUM INC has also vastly surpassed the industry average cash flow growth rate of -59.36%.
- You can view the full Cavium Ratings Report.