Trade-Ideas LLC identified

Linear Technology

(

LLTC

) 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 Linear Technology as such a stock due to the following factors:

  • LLTC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $109.6 million.
  • LLTC has traded 1.3 million shares today.
  • LLTC traded in a range 229.4% of the normal price range with a price range of $2.07.
  • LLTC traded above its daily resistance level (quality: 11 days, meaning that the stock is crossing a resistance level set by the last 11 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 LLTC:

Linear Technology Corporation, together with its subsidiaries, designs, manufactures, and markets a line of analog integrated circuits worldwide. The stock currently has a dividend yield of 3.1%. LLTC has a PE ratio of 18. Currently there are 4 analysts that rate Linear Technology a buy, 3 analysts rate it a sell, and 9 rate it a hold.

The average volume for Linear Technology has been 3.1 million shares per day over the past 30 days. Linear Technology has a market cap of $9.5 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.03 and a short float of 6.4% with 5.64 days to cover. Shares are down 15.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Linear Technology as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, expanding profit margins and growth in earnings per share. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 11.5%. Since the same quarter one year prior, revenues slightly increased by 3.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • LLTC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 7.56, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for LINEAR TECHNOLOGY CORP is currently very high, coming in at 79.68%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 34.97% significantly outperformed against the industry average.
  • 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 2.3% when compared to the same quarter one year prior, going from $129.74 million to $132.72 million.
  • LINEAR TECHNOLOGY CORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, LINEAR TECHNOLOGY CORP increased its bottom line by earning $2.13 versus $1.90 in the prior year. For the next year, the market is expecting a contraction of 10.3% in earnings ($1.91 versus $2.13).

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