Strong And Under The Radar: ASML (ASML)

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 ASML ( ASML) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified ASML as such a stock due to the following factors:

  • ASML has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $68.6 million.
  • ASML is making at least a new 3-day high.
  • ASML is mentioned 1.23 times per day on StockTwits.
  • ASML has not yet been mentioned on StockTwits today.
  • ASML is currently in the upper 20% of its 1-year range.
  • ASML is in the upper 35% of its 20-day range.
  • ASML is in the upper 45% of its 5-day range.
  • ASML is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on ASML:

ASML Holding N.V. engages in the development, production, marketing, sale, and servicing of advanced semiconductor equipment systems with a focus on lithography related systems worldwide. The stock currently has a dividend yield of 0.6%. Currently there are 4 analysts that rate ASML a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for ASML has been 1.2 million shares per day over the past 30 days. ASML has a market cap of $47.6 billion and is part of the technology sector and electronics industry. Shares are up 2.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

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

Highlights from the ratings report include:
  • ASML's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.41, which illustrates the ability to avoid short-term cash problems.
  • 48.05% is the gross profit margin for ASML HOLDING NV which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.39% is above that of the industry average.
  • 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. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market on the basis of return on equity, ASML HOLDING NV has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Compared to its closing price of one year ago, ASML's share price has jumped by 34.10%, exceeding the performance of the broader market during that same time frame. 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.
  • ASML HOLDING NV has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ASML HOLDING NV increased its bottom line by earning $3.27 versus $3.21 in the prior year. This year, the market expects an improvement in earnings ($3.77 versus $3.27).

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