New Lifetime High Reached By Avago Technologies (AVGO)

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 $130.5 million.
  • AVGO has traded 131,129 shares today.
  • AVGO is trading at a new lifetime high.

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More details on AVGO:

Avago Technologies Limited is engaged 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 1.7%. AVGO has a PE ratio of 26.7. Currently there are 9 analysts that rate Avago Technologies a buy, no analysts rate it a sell, and 5 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 $14.6 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.92 and a short float of 1.2% with 1.19 days to cover. Shares are up 12.7% year-to-date as of the close of trading on Monday.

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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 growth in earnings per share. 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 5.9%. Since the same quarter one year prior, revenues rose by 19.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the 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 3.39, which clearly demonstrates the ability to cover short-term cash needs.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 70.17% over the past year, a rise that has exceeded that of the S&P 500 Index. 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 54.61%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.30% is above that of the industry average.
  • AVAGO TECHNOLOGIES LTD has improved earnings per share by 6.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AVAGO TECHNOLOGIES LTD reported lower earnings of $2.19 versus $2.26 in the prior year. This year, the market expects an improvement in earnings ($3.31 versus $2.19).

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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