Trade-Ideas: LM Ericsson Telephone Company (ERIC) Is Today's Pre-Market Mover With Heavy Volume Stock

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 LM Ericsson Telephone Company ( ERIC) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified LM Ericsson Telephone Company as such a stock due to the following factors:

  • ERIC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $55.2 million.
  • ERIC traded 9.2 million shares today in the pre-market hours as of 8:47 AM, representing 210.6% of its average daily volume.

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More details on ERIC:

Ericsson provides telecommunications equipment and services to mobile and fixed network operators worldwide. It operates through four segments: Networks, Global Services, Support Solutions, and Modems. ERIC has a PE ratio of 15.8. Currently there are 5 analysts that rate LM Ericsson Telephone Company a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for LM Ericsson Telephone Company has been 4.4 million shares per day over the past 30 days. LM Ericsson Telephone has a market cap of $44.9 billion and is part of the technology sector and telecommunications industry. Shares are up 7.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates LM Ericsson Telephone Company as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels 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:
  • ERICSSON 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 two years. We feel that this trend should continue. During the past fiscal year, ERICSSON increased its bottom line by earning $0.58 versus $0.28 in the prior year. This year, the market expects an improvement in earnings ($0.84 versus $0.58).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 201.9% when compared to the same quarter one year prior, rising from -$976.55 million to $995.44 million.
  • Although ERIC's debt-to-equity ratio of 0.21 is very low, it is currently higher than that of the industry average. To add to this, ERIC has a quick ratio of 1.84, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 42.18% is the gross profit margin for ERICSSON 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, ERIC's net profit margin of 9.59% significantly trails the industry average.

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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