F5 Networks (FFIV) Is Water-Logged And Getting Wetter 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 F5 Networks ( FFIV) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified F5 Networks as such a stock due to the following factors:

  • FFIV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $76.8 million
  • FFIV has traded 280,570 shares today
  • FFIV traded in a range 202.1% of the normal price range with a price range of $3.20
  • FFIV traded below its daily resistance level (quality: 49 days, meaning that the stock is crossing a resistance level set by the last 49 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal)

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in FFIV with the Ticky from Trade-Ideas. See the FREE profile for FFIV NOW at Trade-Ideas

More details on FFIV:

F5 Networks, Inc. develops, markets, and sells application delivery networking products that optimize the security, performance, and availability of network applications, servers, and storage systems. FFIV has a PE ratio of 27. Currently there are 16 analysts that rate F5 Networks a buy, no analysts rate it a sell, and 11 rate it a hold.

The average volume for F5 Networks has been 984,000 shares per day over the past 30 days. F5 has a market cap of $9.07 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.53 and a short float of 8.3% with 9.83 days to cover. Shares are down 3% year-to-date as of the close of trading on Thursday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates F5 Networks 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, notable return on equity, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.2%. Since the same quarter one year prior, revenues rose by 12.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FFIV 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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.33, which illustrates the ability to avoid short-term cash problems.
  • 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 Communications Equipment industry and the overall market, F5 NETWORKS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for F5 NETWORKS INC is currently very high, coming in at 85.17%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 18.15% is above that of the industry average.
  • Net operating cash flow has significantly increased by 73.60% to $142.30 million when compared to the same quarter last year. In addition, F5 NETWORKS INC has also vastly surpassed the industry average cash flow growth rate of -72.15%.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

Facebook, Amazon, Microsoft and Ford - 5 Things You Must Know

Facebook, Amazon, Microsoft and Ford - 5 Things You Must Know

Facebook Set for Biggest Gain in Two Years After Q1 Earnings Top Forecasts

Facebook Set for Biggest Gain in Two Years After Q1 Earnings Top Forecasts

Global Stocks Mixed, U.S. Futures Soften as Earnings, Oil, Rates Cloud Sentiment

Global Stocks Mixed, U.S. Futures Soften as Earnings, Oil, Rates Cloud Sentiment

European Automakers Gain on Reports China Mulling Auto Tariff Reduction

European Automakers Gain on Reports China Mulling Auto Tariff Reduction

Deutsche Bank Plans 'Significant' Job Cuts as Q1 Profits Slump

Deutsche Bank Plans 'Significant' Job Cuts as Q1 Profits Slump