Today's Weak On High Volume Stock: Freescale Semiconductor (FSL)

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 Freescale Semiconductor ( FSL) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Freescale Semiconductor as such a stock due to the following factors:

  • FSL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $39.3 million.
  • FSL has traded 426,930 shares today.
  • FSL is trading at 9.99 times the normal volume for the stock at this time of day.
  • FSL is trading at a new low 3.04% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on FSL:

Freescale Semiconductor, Ltd. provides embedded processing solutions for automotive, networking, industrial, and consumer markets worldwide. Currently there are 5 analysts that rate Freescale Semiconductor a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Freescale Semiconductor has been 1.8 million shares per day over the past 30 days. Freescale Semiconductor has a market cap of $6.3 billion and is part of the technology sector and electronics industry. The stock has a beta of 2.24 and a short float of 17.4% with 9.71 days to cover. Shares are up 27% 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 Freescale Semiconductor as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:
  • FSL's revenue growth has slightly outpaced the industry average of 10.3%. Since the same quarter one year prior, revenues rose by 14.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • 48.61% is the gross profit margin for FREESCALE SEMICONDUCTOR LTD which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, FSL's net profit margin of 7.22% significantly trails the industry average.
  • FREESCALE SEMICONDUCTOR LTD reported significant earnings per share improvement in the most recent quarter compared to 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, FREESCALE SEMICONDUCTOR LTD reported poor results of -$0.81 versus -$0.42 in the prior year. This year, the market expects an improvement in earnings ($1.50 versus -$0.81).

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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