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 KLA-Tencor Corporation ( KLAC) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified KLA-Tencor Corporation as such a stock due to the following factors:
- KLAC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $57.3 million.
- KLAC has traded 689,910 shares today.
- KLAC traded in a range 200.6% of the normal price range with a price range of $2.18.
- KLAC traded below its daily resistance level (quality: 53 days, meaning that the stock is crossing a resistance level set by the last 53 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower. EXCLUSIVE OFFER: Get the inside scoop on opportunities in KLAC with the Ticky from Trade-Ideas. See the FREE profile for KLAC NOW at Trade-Ideas More details on KLAC: KLA-Tencor Corporation engages in design, manufacture, and marketing of process control and yield management solutions for the semiconductor and related nanoelectronics industries worldwide. The stock currently has a dividend yield of 2.8%. KLAC has a PE ratio of 20.7. Currently there are 8 analysts that rate KLA-Tencor Corporation a buy, 1 analyst rates it a sell, and 4 rate it a hold. The average volume for KLA-Tencor Corporation has been 1.3 million shares per day over the past 30 days. KLA-Tencor has a market cap of $10.6 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.30 and a short float of 3.5% with 5.19 days to cover. Shares are up 33.3% year-to-date as of the close of trading on Tuesday. 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 KLA-Tencor Corporation as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- Compared to its closing price of one year ago, KLAC's share price has jumped by 43.11%, 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, KLAC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Although KLAC's debt-to-equity ratio of 0.21 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 4.06, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for KLA-TENCOR CORP is rather high; currently it is at 61.35%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 16.89% trails the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.3%. Since the same quarter one year prior, revenues slightly dropped by 8.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full KLA-Tencor Corporation Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.