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 Applied Materials ( AMAT) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Applied Materials as such a stock due to the following factors:
- AMAT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $323.0 million.
- AMAT has a PE ratio of 30.8.
- AMAT is currently in the upper 30% of its 1-year range.
- AMAT is in the upper 25% of its 20-day range.
- AMAT is in the upper 35% of its 5-day range.
- AMAT is currently trading above yesterday's high.
- AMAT has experienced a gap between today's open and yesterday's close of 0.7%.
'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 AMAT with the Ticky from Trade-Ideas. See the FREE profile for AMAT NOW at Trade-Ideas More details on AMAT: Applied Materials, Inc. provides manufacturing equipment, services, and software to the semiconductor, flat panel display, solar photovoltaic (PV), and related industries worldwide. The stock currently has a dividend yield of 1.8%. AMAT has a PE ratio of 30.8. Currently there are 8 analysts that rate Applied Materials a buy, 1 analyst rates it a sell, and 7 rate it a hold. The average volume for Applied Materials has been 14.8 million shares per day over the past 30 days. Applied has a market cap of $26.6 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.78 and a short float of 6.4% with 5.33 days to cover. Shares are up 23% 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 Applied Materials 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, impressive record of earnings per share growth and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 19.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- AMAT's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, AMAT has a quick ratio of 1.58, which demonstrates the ability of the company to cover short-term liquidity needs.
- Powered by its strong earnings growth of 290.90% and other important driving factors, this stock has surged by 43.80% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AMAT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- APPLIED MATERIALS 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, APPLIED MATERIALS INC increased its bottom line by earning $0.21 versus $0.06 in the prior year. This year, the market expects an improvement in earnings ($1.06 versus $0.21).
- 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 303.1% when compared to the same quarter one year prior, rising from -$129.00 million to $262.00 million.
- You can view the full Applied Materials 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.