Qorvo (QRVO) Showing Signs Of Being A Momo Momentum 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 Qorvo ( QRVO) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Qorvo as such a stock due to the following factors:

  • QRVO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $478.1 million.
  • QRVO has a PE ratio of 39.
  • QRVO is currently in the upper 30% of its 1-year range.
  • QRVO is in the upper 25% of its 20-day range.
  • QRVO is in the upper 35% of its 5-day range.
  • QRVO is currently trading above yesterday's high.
  • QRVO has experienced a gap between today's open and yesterday's close of 1.2%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on QRVO:

Qorvo, Inc. provides technologies and radio frequency (RF) solutions for mobile, infrastructure, defense, and aerospace applications in the United States and internationally. The company operates through Mobile Products, and Infrastructure and Defense Products segments. QRVO has a PE ratio of 39. Currently there are 10 analysts that rate Qorvo a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Qorvo has been 2.4 million shares per day over the past 30 days. Qorvo has a market cap of $12.6 billion and is part of the technology sector and electronics industry. Shares are unchanged year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Qorvo 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, solid stock price performance, compelling growth in net income and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • QRVO's very impressive revenue growth greatly exceeded the industry average of 0.7%. Since the same quarter one year prior, revenues leaped by 148.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • QRVO 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 2.84, which clearly demonstrates the ability to cover short-term cash needs.
  • This stock has managed to rise its share value by 114.95% over the past twelve months. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • QORVO INC has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. 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, QORVO INC increased its bottom line by earning $2.60 versus $0.20 in the prior year. This year, the market expects an improvement in earnings ($5.02 versus $2.60).
  • 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 719.7% when compared to the same quarter one year prior, rising from -$1.05 million to $6.48 million.

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