RF Micro Devices (RFMD) Weak 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 RF Micro Devices ( RFMD) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified RF Micro Devices as such a stock due to the following factors:

  • RFMD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $151.1 million.
  • RFMD has traded 1.3 million shares today.
  • RFMD is trading at 2.07 times the normal volume for the stock at this time of day.
  • RFMD is trading at a new low 3.02% 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 RFMD:

RF Micro Devices, Inc. is engaged in the design, development, manufacture, and marketing of radio frequency (RF) solutions for original equipment manufacturers and original design manufacturers in wireless and wired communications applications in the United States and internationally. RFMD has a PE ratio of 47.4. Currently there are 9 analysts that rate RF Micro Devices a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for RF Micro Devices has been 11.8 million shares per day over the past 30 days. RF Micro Devices has a market cap of $4.8 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.25 and a short float of 22.5% with 6.14 days to cover. Shares are up 221.5% year-to-date as of the close of trading on Wednesday.

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 RF Micro Devices as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, good cash flow from operations and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • RF MICRO DEVICES INC reported significant earnings per share improvement 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, RF MICRO DEVICES INC turned its bottom line around by earning $0.05 versus -$0.20 in the prior year. This year, the market expects an improvement in earnings ($1.13 versus $0.05).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 974.5% when compared to the same quarter one year prior, rising from $5.89 million to $63.31 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 18.7%. Since the same quarter one year prior, revenues rose by 16.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 172.89% to $58.70 million when compared to the same quarter last year. In addition, RF MICRO DEVICES INC has also vastly surpassed the industry average cash flow growth rate of 11.95%.
  • The gross profit margin for RF MICRO DEVICES INC is rather high; currently it is at 51.48%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 17.45% trails the industry average.

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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