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 Altera ( ALTR) 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 Altera as such a stock due to the following factors:
- ALTR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $104.0 million.
- ALTR has traded 1.7 million shares today.
- ALTR traded in a range 210.7% of the normal price range with a price range of $1.69.
- ALTR traded below its daily resistance level (quality: 43 days, meaning that the stock is crossing a resistance level set by the last 43 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 ALTR with the Ticky from Trade-Ideas. See the FREE profile for ALTR NOW at Trade-Ideas More details on ALTR: Altera Corporation, a semiconductor company, designs, manufactures, and sells programmable logic devices (PLD), HardCopy application-specific integrated circuit (ASIC) devices, power system-on-chip devices (PowerSoCs), pre-defined design building blocks, and proprietary development software. The stock currently has a dividend yield of 1.7%. ALTR has a PE ratio of 26.4. Currently there are 10 analysts that rate Altera a buy, 2 analysts rate it a sell, and 4 rate it a hold. The average volume for Altera has been 3.3 million shares per day over the past 30 days. Altera has a market cap of $11.5 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.25 and a short float of 2.5% with 2.80 days to cover. Shares are up 11% year-to-date as of the close of trading on Thursday. 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 Altera as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 5.2%. Since the same quarter one year prior, revenues slightly increased by 3.4%. 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.
- Net operating cash flow has slightly increased to $130.76 million or 3.19% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -9.54%.
- Despite currently having a low debt-to-equity ratio of 0.42, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 4.94 is very high and demonstrates very strong liquidity.
- The gross profit margin for ALTERA CORP is currently very high, coming in at 70.81%. Regardless of ALTR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ALTR's net profit margin of 21.77% compares favorably to the industry average.
- ALTERA CORP's earnings per share declined by 16.2% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, ALTERA CORP reported lower earnings of $1.36 versus $1.71 in the prior year. This year, the market expects an improvement in earnings ($1.43 versus $1.36).
- You can view the full Altera 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.