Cavium (CAVM) Hits New Lifetime High Today

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 Cavium ( CAVM) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Cavium as such a stock due to the following factors:

  • CAVM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $45.8 million.
  • CAVM has traded 26,949 shares today.
  • CAVM is trading at a new lifetime high.

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More details on CAVM:

Cavium, Inc. designs, develops, and markets semiconductor processors for intelligent and secure networks. The company operates through Semiconductor Products, and Software and Services segments. Currently there are 10 analysts that rate Cavium a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Cavium has been 863,800 shares per day over the past 30 days. Cavium has a market cap of $2.8 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.53 and a short float of 8.3% with 5.52 days to cover. Shares are up 52.3% year-to-date as of the close of trading on Monday.

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 Cavium as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.0%. Since the same quarter one year prior, revenues rose by 22.2%. 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.
  • CAVM's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CAVM has a quick ratio of 2.07, which demonstrates the ability of the company to cover short-term liquidity needs.
  • CAVIUM INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CAVIUM INC continued to lose money by earning -$0.06 versus -$2.24 in the prior year. This year, the market expects an improvement in earnings ($1.45 versus -$0.06).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, CAVIUM INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • 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 significantly decreased by 156.6% when compared to the same quarter one year ago, falling from -$4.30 million to -$11.04 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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