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 Cree ( CREE) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Cree as such a stock due to the following factors:
- CREE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $183.8 million.
- CREE has a PE ratio of 73.5.
- CREE is currently in the upper 30% of its 1-year range.
- CREE is in the upper 25% of its 20-day range.
- CREE is in the upper 35% of its 5-day range.
- CREE is currently trading above yesterday's high.
- CREE has experienced a gap between today's open and yesterday's close of 2.3%.
'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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in CREE with the Ticky from Trade-Ideas. See the FREE profile for CREE NOW at Trade-Ideas More details on CREE: Cree, Inc. develops, manufactures, and sells lighting-class light emitting diode (LED), lighting, and semiconductor products for power and radio-frequency (RF) applications in the United States, China, Europe, South Korea, Japan, Malaysia, and Taiwan. CREE has a PE ratio of 73.5. Currently there are 5 analysts that rate Cree a buy, 2 analysts rate it a sell, and 9 rate it a hold. The average volume for Cree has been 2.3 million shares per day over the past 30 days. Cree has a market cap of $7.5 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.63 and a short float of 10.7% with 3.93 days to cover. Shares are up 0.5% 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 Cree as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 0.4%. Since the same quarter one year prior, revenues rose by 23.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CREE 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. Along with this, the company maintains a quick ratio of 5.02, which clearly demonstrates the ability to cover short-term cash needs.
- CREE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, CREE INC increased its bottom line by earning $0.74 versus $0.38 in the prior year. This year, the market expects an improvement in earnings ($1.65 versus $0.74).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 89.2% when compared to the same quarter one year prior, rising from $16.12 million to $30.50 million.
- 46.79% is the gross profit margin for CREE INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CREE's net profit margin of 7.79% significantly trails the industry average.
- You can view the full Cree 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.