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 $101.1 million.
- ALTR has traded 2.6 million shares today.
- ALTR traded in a range 251.7% of the normal price range with a price range of $2.03.
- ALTR traded below its daily resistance level (quality: 76 days, meaning that the stock is crossing a resistance level set by the last 76 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 12 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 3.2 million shares per day over the past 30 days. Altera has a market cap of $10.8 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.25 and a short float of 2.1% with 2.19 days to cover. Shares are up 5% 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 hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share. Highlights from the ratings report include:
- ALTR's revenue growth has slightly outpaced the industry average of 2.3%. 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. In addition, ALTERA CORP has also vastly surpassed the industry average cash flow growth rate of -71.05%.
- 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 company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has decreased by 18.1% when compared to the same quarter one year ago, dropping from $120.81 million to $98.93 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, ALTERA CORP's return on equity is below that of both the industry average and the S&P 500.
- 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.