Synopsys (SNPS) Flagged As Strong On High Volume

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 Synopsys ( SNPS) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Synopsys as such a stock due to the following factors:

  • SNPS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.7 million.
  • SNPS has traded 87,641 shares today.
  • SNPS is trading at 5.85 times the normal volume for the stock at this time of day.
  • SNPS is trading at a new high 4.07% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 SNPS:

Synopsys, Inc. provides electronic design automation (EDA) software products used to design integrated circuits (IC) and electronic systems primarily in the United States, Europe, Japan, and the rest of Asia Pacific. SNPS has a PE ratio of 26.7. Currently there are 3 analysts that rate Synopsys a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Synopsys has been 498,400 shares per day over the past 30 days. Synopsys has a market cap of $6.7 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.78 and a short float of 0.7% with 2.04 days to cover. Shares are up 6.3% 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 Synopsys 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, compelling growth in net income, revenue growth and reasonable valuation levels. 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 a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • SYNOPSYS INC has improved earnings per share by 27.3% 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 year. We feel that this trend should continue. During the past fiscal year, SYNOPSYS INC increased its bottom line by earning $1.58 versus $1.22 in the prior year. This year, the market expects an improvement in earnings ($2.50 versus $1.58).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 25.5% when compared to the same quarter one year prior, rising from $52.30 million to $65.66 million.
  • SNPS's revenue growth trails the industry average of 26.7%. 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.

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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