Trade-Ideas: Avago Technologies (AVGO) Is Today's New Lifetime High 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 Avago Technologies ( AVGO) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Avago Technologies as such a stock due to the following factors:

  • AVGO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $782.8 million.
  • AVGO has traded 449,117 shares today.
  • AVGO is trading at a new lifetime high.

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More details on AVGO:

Avago Technologies Limited designs, develops, and supplies semiconductor devices with a focus on analog III-V based products. The company operates through four segments: Wireless Communications, Wired Infrastructure, Enterprise Storage, and Industrial & Other segments. The stock currently has a dividend yield of 1.2%. AVGO has a PE ratio of 78. Currently there are 14 analysts that rate Avago Technologies a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Avago Technologies has been 2.2 million shares per day over the past 30 days. Avago has a market cap of $33.7 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.30 and a short float of 1.3% with 0.51 days to cover. Shares are up 40.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Avago Technologies as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, good cash flow from operations, increase in net income and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • AVGO's very impressive revenue growth greatly exceeded the industry average of 0.5%. Since the same quarter one year prior, revenues leaped by 133.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for AVAGO TECHNOLOGIES LTD is rather high; currently it is at 61.68%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.18% is above that of the industry average.
  • Net operating cash flow has significantly increased by 110.04% to $481.00 million when compared to the same quarter last year. In addition, AVAGO TECHNOLOGIES LTD has also vastly surpassed the industry average cash flow growth rate of 14.73%.
  • 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 161.9% when compared to the same quarter one year prior, rising from $134.00 million to $351.00 million.
  • Powered by its strong earnings growth of 130.18% and other important driving factors, this stock has surged by 89.43% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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