Texas Instruments (TXN) Is Today's Water-Logged And Getting Wetter 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 Texas Instruments ( TXN) 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 Texas Instruments as such a stock due to the following factors:

  • TXN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $189.9 million.
  • TXN has traded 2.4 million shares today.
  • TXN traded in a range 214% of the normal price range with a price range of $1.15.
  • TXN traded below its daily resistance level (quality: 9 days, meaning that the stock is crossing a resistance level set by the last 9 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.

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More details on TXN:

Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers worldwide. The company operates in three segments: Analog, Embedded Processing, and Other. The stock currently has a dividend yield of 2.5%. TXN has a PE ratio of 23.3. Currently there are 7 analysts that rate Texas Instruments a buy, 3 analysts rate it a sell, and 14 rate it a hold.

The average volume for Texas Instruments has been 5.0 million shares per day over the past 30 days. Texas Instruments has a market cap of $51.4 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.22 and a short float of 2.2% with 5.00 days to cover. Shares are up 9.4% year-to-date as of the close of trading on Friday.

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 Texas Instruments as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, notable return on equity and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • Compared to where it was 12 months ago, this stock has enjoyed a nice rise of 25.27% which was in line with the performance of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TXN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • TEXAS INSTRUMENTS INC has improved earnings per share by 6.9% 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, TEXAS INSTRUMENTS INC increased its bottom line by earning $1.92 versus $1.50 in the prior year. This year, the market expects an improvement in earnings ($2.41 versus $1.92).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.1%. Since the same quarter one year prior, revenues slightly increased by 8.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, TEXAS INSTRUMENTS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $775.00 million or 14.81% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -8.94%.

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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