Trade-Ideas: Avago Technologies (AVGO) Is Today's New Lifetime High 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 Avago Technologies ( AVGO) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Avago Technologies as such a stock due to the following factors:

  • AVGO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $114.8 million.
  • AVGO has traded 36,151 shares today.
  • AVGO is trading at a new lifetime high.

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More details on AVGO:

Avago Technologies Limited is engaged in the design, development, and supply of analog semiconductor devices with a focus on III-V based products. The stock currently has a dividend yield of 1.5%. AVGO has a PE ratio of 32.1. Currently there are 13 analysts that rate Avago Technologies a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Avago Technologies has been 1.8 million shares per day over the past 30 days. Avago has a market cap of $19.2 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.91 and a short float of 2.7% with 1.82 days to cover. Shares are up 44.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Avago Technologies as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, good cash flow from operations, increase in net income and solid stock price performance. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 24.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for AVAGO TECHNOLOGIES LTD is rather high; currently it is at 58.92%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.53% is above that of the industry average.
  • Net operating cash flow has increased to $251.00 million or 31.41% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -8.94%.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Semiconductors & Semiconductor Equipment industry average. The net income increased by 39.8% when compared to the same quarter one year prior, rising from $113.00 million to $158.00 million.
  • Powered by its strong earnings growth of 35.55% and other important driving factors, this stock has surged by 108.44% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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