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 ASML ( ASML) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified ASML as such a stock due to the following factors:
- ASML has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $82.5 million.
- ASML has traded 54,031 shares today.
- ASML is trading at 33.67 times the normal volume for the stock at this time of day.
- ASML crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend. EXCLUSIVE OFFER: Get the inside scoop on opportunities in ASML with the Ticky from Trade-Ideas. See the FREE profile for ASML NOW at Trade-Ideas More details on ASML: ASML Holding NV engages in designing, manufacturing, marketing, and servicing semiconductor processing equipment used in the fabrication of integrated circuits or chips worldwide. The stock currently has a dividend yield of 0.7%. Currently there are 6 analysts that rate ASML a buy, 2 analysts rate it a sell, and 2 rate it a hold. The average volume for ASML has been 961,500 shares per day over the past 30 days. ASML has a market cap of $40.1 billion and is part of the technology sector and electronics industry. Shares are down 2.7% 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 ASML 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 and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 9.7%. Since the same quarter one year prior, revenues rose by 16.4%. 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.
- Although ASML's debt-to-equity ratio of 0.16 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.37, which illustrates the ability to avoid short-term cash problems.
- Compared to its closing price of one year ago, ASML's share price has jumped by 41.95%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- 45.34% is the gross profit margin for ASML HOLDING NV which we consider to be strong. Regardless of ASML's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 14.68% trails the industry average.
- Net operating cash flow has significantly decreased to $167.68 million or 73.70% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full ASML 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.