Cavium Inc (CAVM): Today's Featured Technology Winner

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Cavium ( CAVM) pushed the Technology sector higher today making it today's featured technology winner. The sector as a whole closed the day down 0.1%. By the end of trading, Cavium rose 50 cents (1.5%) to $34.42 on average volume. Throughout the day, 1.3 million shares of Cavium exchanged hands as compared to its average daily volume of 1.1 million shares. The stock ranged in a price between $33.85-$35.17 after having opened the day at $34.07 as compared to the previous trading day's close of $33.92. Other companies within the Technology sector that increased today were: A123 Systems ( AONE), up 19.5%, India ( REDF), up 19.1%, B Communications ( BCOM), up 18.1%, and AudioCodes ( AUDC), up 14.1%.

Cavium, Inc. designs, develops, and markets semiconductor processors for intelligent and secure networks. Its semiconductor products enable customers to develop networking, wireless, storage, and electronic equipment. Cavium has a market cap of $1.68 billion and is part of the electronics industry. The company has a P/E ratio of 29.2, above the S&P 500 P/E ratio of 17.7. Shares are down 33% year to date as of the close of trading on Friday. Currently there are 13 analysts that rate Cavium a buy, one analyst rates it a sell, and six rate it a hold.

TheStreet Ratings rates Cavium as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

On the negative front, Winland Electronics ( WEX), down 16.7%, Local Corporation ( LOCM), down 15.1%, Dynasil Corporation of America ( DYSL), down 13.1%, and Intelligent Systems ( INS), down 13%, were all laggards within the technology sector with Telefonica ( TEF) being today's technology sector laggard.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the technology sector could consider Technology Select Sector SPDR ( XLK) while those bearish on the technology sector could consider ProShares Ultra Short Technology ( REW).

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