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 momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified LSI Corporation as such a stock due to the following factors:
- LSI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $383.7 million.
- LSI has a PE ratio of 60.7.
- LSI is currently in the upper 30% of its 1-year range.
- LSI is in the upper 25% of its 20-day range.
- LSI is in the upper 35% of its 5-day range.
- LSI is currently trading above yesterday's high.
- LSI has experienced a gap between today's open and yesterday's close of 0.1%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.
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More details on LSI:
LSI Corporation designs, develops, and markets storage and networking semiconductors worldwide. The stock currently has a dividend yield of 1.1%. LSI has a PE ratio of 60.7. Currently there are 2 analysts that rate LSI Corporation a buy, 2 analysts rate it a sell, and 9 rate it a hold.
The average volume for LSI Corporation has been 9.4 million shares per day over the past 30 days. LSI has a market cap of $6.0 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.85 and a short float of 2.7% with 0.42 days to cover. Shares are up 54.6% year-to-date as of the close of trading on Thursday.
rates LSI Corporation as a
. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- LSI 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. To add to this, LSI has a quick ratio of 2.08, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for LSI CORP is rather high; currently it is at 59.15%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, LSI's net profit margin of 6.02% significantly trails the industry average.
- LSI CORP's earnings per share declined by 14.3% 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, LSI CORP increased its bottom line by earning $0.34 versus $0.15 in the prior year. This year, the market expects an improvement in earnings ($0.64 versus $0.34).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.0%. Since the same quarter one year prior, revenues slightly dropped by 2.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full LSI Corporation Ratings Report.