Trade-Ideas: Applied Materials (AMAT) Is Today's Post-Market Leader Stock

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 Applied Materials ( AMAT) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Applied Materials as such a stock due to the following factors:

  • AMAT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $436.6 million.
  • AMAT is up 2% today from today's close.

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More details on AMAT:

Applied Materials, Inc. provides manufacturing equipment, services, and software to the semiconductor, flat panel display, solar photovoltaic (PV), and related industries worldwide. The stock currently has a dividend yield of 2%. AMAT has a PE ratio of 21. Currently there are 10 analysts that rate Applied Materials a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Applied Materials has been 21.7 million shares per day over the past 30 days. Applied has a market cap of $24.4 billion and is part of the technology sector and electronics industry. The stock has a beta of 2.16 and a short float of 6.3% with 2.27 days to cover. Shares are down 20.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Applied Materials as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • AMAT's revenue growth has slightly outpaced the industry average of 0.0%. Since the same quarter one year prior, revenues slightly increased by 7.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • AMAT's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, AMAT has a quick ratio of 1.85, which demonstrates the ability of the company to cover short-term liquidity needs.
  • APPLIED MATERIALS INC has improved earnings per share by 33.3% 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 two years. We feel that this trend should continue. During the past fiscal year, APPLIED MATERIALS INC increased its bottom line by earning $0.87 versus $0.21 in the prior year. This year, the market expects an improvement in earnings ($1.23 versus $0.87).
  • 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 37.5% when compared to the same quarter one year prior, rising from $253.00 million to $348.00 million.

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