Trade-Ideas: Cirrus Logic (CRUS) Is Today's "Storm The Castle" Stock - TheStreet

Trade-Ideas LLC identified

Cirrus Logic

(

CRUS

) 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 Cirrus Logic as such a stock due to the following factors:

  • CRUS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $66.1 million.
  • CRUS has traded 1.6 million shares today.
  • CRUS is trading at 1.93 times the normal volume for the stock at this time of day.
  • CRUS 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 CRUS:

Cirrus Logic, Inc., a fabless semiconductor company, develops analog and mixed-signal integrated circuits for a range of consumer and industrial markets. CRUS has a PE ratio of 1. Currently there are 4 analysts that rate Cirrus Logic a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Cirrus Logic has been 1.7 million shares per day over the past 30 days. Cirrus Logic has a market cap of $1.8 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.28 and a short float of 12% with 2.81 days to cover. Shares are up 24.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Cirrus Logic as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, solid stock price performance and increase in net income. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • CRUS's very impressive revenue growth greatly exceeded the industry average of 13.4%. Since the same quarter one year prior, revenues leaped by 85.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CRUS's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CRUS has a quick ratio of 1.69, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Powered by its strong earnings growth of 212.50% and other important driving factors, this stock has surged by 57.93% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CRUS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • 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 225.5% when compared to the same quarter one year prior, rising from $10.25 million to $33.35 million.

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