Watch Out: Barbarians At The Gate For Xilinx (XLNX)

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 Xilinx ( XLNX) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Xilinx as such a stock due to the following factors:

  • XLNX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $102.9 million.
  • XLNX has traded 2.0 million shares today.
  • XLNX traded in a range 342.6% of the normal price range with a price range of $2.79.
  • XLNX traded above its daily resistance level (quality: 154 days, meaning that the stock is crossing a resistance level set by the last 154 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in XLNX with the Ticky from Trade-Ideas. See the FREE profile for XLNX NOW at Trade-Ideas

More details on XLNX:

Xilinx, Inc. designs and develops programmable devices and associated technologies worldwide. The stock currently has a dividend yield of 2.8%. XLNX has a PE ratio of 19. Currently there are 5 analysts that rate Xilinx a buy, 1 analyst rates it a sell, and 14 rate it a hold.

The average volume for Xilinx has been 3.4 million shares per day over the past 30 days. Xilinx has a market cap of $11.4 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.60 and a short float of 4.2% with 4.74 days to cover. Shares are up 0.8% year-to-date as of the close of trading on Wednesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Xilinx 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, notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The debt-to-equity ratio is somewhat low, currently at 0.60, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 3.69, which clearly demonstrates the ability to cover short-term cash needs.
  • 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. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, XILINX INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for XILINX INC is currently very high, coming in at 72.49%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.74% is above that of the industry average.
  • XLNX, with its decline in revenue, slightly underperformed the industry average of 0.0%. Since the same quarter one year prior, revenues slightly dropped by 8.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • XILINX INC's earnings per share declined by 5.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, XILINX INC increased its bottom line by earning $2.36 versus $2.19 in the prior year. For the next year, the market is expecting a contraction of 4.9% in earnings ($2.25 versus $2.36).

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

If you liked this article you might like

Which Chip Companies Could Be Acquired Next?

Which Chip Companies Could Be Acquired Next?

Will the S&P 500 Soon Explode Higher Another 25% or Completely Fall Apart?

Will the S&P 500 Soon Explode Higher Another 25% or Completely Fall Apart?

What Was Behind Intel's Very Solid Quarter

What Was Behind Intel's Very Solid Quarter

There Is Good and a Lot of Bad in General Electric Earnings

There Is Good and a Lot of Bad in General Electric Earnings

Jim Cramer: The 3 Best Sectors That Lifted the Stock Market

Jim Cramer: The 3 Best Sectors That Lifted the Stock Market