Skyworks Solutions (SWKS) Is Strong On High Volume Today

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

  • SWKS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $300.3 million.
  • SWKS has traded 673,304 shares today.
  • SWKS is trading at 2.88 times the normal volume for the stock at this time of day.
  • SWKS is trading at a new high 3.00% 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 SWKS:

Skyworks Solutions, Inc., together with its subsidiaries, designs, develops, manufactures, and markets analog and mixed signal semiconductors worldwide. The stock currently has a dividend yield of 0.5%. SWKS has a PE ratio of 29. Currently there are 13 analysts that rate Skyworks Solutions a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Skyworks Solutions has been 4.4 million shares per day over the past 30 days. Skyworks has a market cap of $18.8 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.45 and a short float of 3.6% with 1.84 days to cover. Shares are up 35.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Skyworks Solutions as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • SWKS's very impressive revenue growth greatly exceeded the industry average of 0.0%. Since the same quarter one year prior, revenues leaped by 58.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SWKS 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 4.46, which clearly demonstrates the ability to cover short-term cash needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, SKYWORKS SOLUTIONS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Powered by its strong earnings growth of 112.50% and other important driving factors, this stock has surged by 134.92% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SWKS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • SKYWORKS SOLUTIONS 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, SKYWORKS SOLUTIONS INC increased its bottom line by earning $2.37 versus $1.44 in the prior year. This year, the market expects an improvement in earnings ($5.12 versus $2.37).

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