Trade-Ideas: NetApp (NTAP) Is Today's Post-Market Leader 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 NetApp ( NTAP) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified NetApp as such a stock due to the following factors:

  • NTAP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $135.2 million.
  • NTAP is up 2.7% today from today's close.

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More details on NTAP:

NetApp, Inc. is engaged in design, manufacture, and marketing of networked storage solutions. The company provides storage and data management software, systems, and services. The stock currently has a dividend yield of 1.7%. NTAP has a PE ratio of 21.5. Currently there are 6 analysts that rate NetApp a buy, 3 analysts rate it a sell, and 16 rate it a hold.

The average volume for NetApp has been 3.8 million shares per day over the past 30 days. NetApp has a market cap of $12.8 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 1.77 and a short float of 2.2% with 2.38 days to cover. Shares are down 4.5% year-to-date as of the close of trading on Tuesday.

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 NetApp as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, notable return on equity and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • NETAPP INC has improved earnings per share by 25.5% 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, NETAPP INC increased its bottom line by earning $1.85 versus $1.37 in the prior year. This year, the market expects an improvement in earnings ($2.96 versus $1.85).
  • Although NTAP's debt-to-equity ratio of 0.26 is very low, it is currently higher than that of the industry average. To add to this, NTAP has a quick ratio of 2.17, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for NETAPP INC is rather high; currently it is at 68.17%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 11.94% trails the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Computers & Peripherals industry and the overall market on the basis of return on equity, NETAPP INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Computers & Peripherals industry average. The net income increased by 13.3% when compared to the same quarter one year prior, going from $173.80 million to $197.00 million.

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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