Strong On High Volume: Marvell Technology Group (MRVL)

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.

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

  • MRVL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $97.3 million.
  • MRVL has traded 815,976 shares today.
  • MRVL is trading at 2.75 times the normal volume for the stock at this time of day.
  • MRVL is trading at a new high 3.05% 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 MRVL:

Marvell Technology Group Ltd. designs, develops, and markets analog, mixed-signal, digital signal processing, and embedded and standalone integrated circuits. The stock currently has a dividend yield of 1.7%. MRVL has a PE ratio of 16.7. Currently there are 9 analysts that rate Marvell Technology Group a buy, 4 analysts rate it a sell, and 11 rate it a hold.

The average volume for Marvell Technology Group has been 6.8 million shares per day over the past 30 days. Marvell Technology Group has a market cap of $7.2 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.38 and a short float of 1.6% with 1.52 days to cover. Shares are down 3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Marvell Technology Group as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • MRVL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.63, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has increased to $142.20 million or 41.50% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 15.93%.
  • The gross profit margin for MARVELL TECHNOLOGY GROUP LTD is rather high; currently it is at 54.50%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.52% trails the industry average.
  • MRVL, with its decline in revenue, slightly underperformed the industry average of 0.5%. Since the same quarter one year prior, revenues slightly dropped by 8.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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