Trade-Ideas: Avago Technologies (AVGO) Is Today's New Lifetime High Stock

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 Avago Technologies ( AVGO) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Avago Technologies as such a stock due to the following factors:

  • AVGO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $135.1 million.
  • AVGO has traded 2.2 million shares today.
  • AVGO is trading at a new lifetime high.

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More details on AVGO:

Avago Technologies Limited engages in the design, development, and supply of analog semiconductor devices with a focus on III-V based products. The stock currently has a dividend yield of 2.2%. AVGO has a PE ratio of 19.7. Currently there are 11 analysts that rate Avago Technologies a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Avago Technologies has been 2.2 million shares per day over the past 30 days. Avago has a market cap of $10.5 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.98 and a short float of 1.3% with 0.93 days to cover. Shares are up 34% year to date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Avago Technologies 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, solid stock price performance, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 13.8%. Since the same quarter one year prior, revenues slightly increased by 6.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • AVGO's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.23, which clearly demonstrates the ability to cover short-term cash needs.
  • Compared to its closing price of one year ago, AVGO's share price has jumped by 26.32%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AVGO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The gross profit margin for AVAGO TECHNOLOGIES LTD is rather high; currently it is at 54.50%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.04% is above that of the industry average.
  • Net operating cash flow has slightly increased to $137.00 million or 7.03% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.06%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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