Broadcom (BRCM) Moving On Heavy Volume In The Pre-Market Hours

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 Broadcom ( BRCM) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Broadcom as such a stock due to the following factors:

  • BRCM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $602.2 million.
  • BRCM traded 1.9 million shares today in the pre-market hours as of 8:00 AM, representing 17.2% of its average daily volume.

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More details on BRCM:

Broadcom Corporation provides semiconductor solutions for wired and wireless communications. Its products offer voice, video, data, and multimedia connectivity in the home, office, and mobile environments. The stock currently has a dividend yield of 1.2%. BRCM has a PE ratio of 41. Currently there are 21 analysts that rate Broadcom a buy, 1 analyst rates it a sell, and 10 rate it a hold.

The average volume for Broadcom has been 6.3 million shares per day over the past 30 days. Broadcom has a market cap of $25.9 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.73 and a short float of 1.4% with 0.87 days to cover. Shares are up 8.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Broadcom 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 expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • BRCM's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 3.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • BRCM's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.13, which clearly demonstrates the ability to cover short-term cash needs.
  • BROADCOM CORP has improved earnings per share by 21.4% 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 year. We feel that this trend should continue. During the past fiscal year, BROADCOM CORP increased its bottom line by earning $1.08 versus $0.74 in the prior year. This year, the market expects an improvement in earnings ($3.04 versus $1.08).
  • 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 26.7% when compared to the same quarter one year prior, rising from $165.00 million to $209.00 million.
  • The gross profit margin for BROADCOM CORP is rather high; currently it is at 56.41%. 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 10.15% trails the industry average.

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