Trade-Ideas LLC identified Cavium ( CAVM) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Cavium as such a stock due to the following factors:

  • CAVM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $50.0 million.
  • CAVM has traded 114,770 shares today.
  • CAVM is trading at 3.68 times the normal volume for the stock at this time of day.
  • CAVM is trading at a new high 3.01% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on CAVM:

Cavium, Inc. designs, develops, and markets semiconductor processors for intelligent and secure networks in United States and internationally. Currently there are 15 analysts that rate Cavium a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Cavium has been 756,900 shares per day over the past 30 days. Cavium has a market cap of $3.5 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.85 and a short float of 8.8% with 5.21 days to cover. Shares are down 0.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cavium as a hold. 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 and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 11.5%. Since the same quarter one year prior, revenues rose by 15.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CAVM's debt-to-equity ratio is very low at 0.11 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 2.58, which clearly demonstrates the ability to cover short-term cash needs.
  • CAVIUM INC has improved earnings per share by 47.6% in the most recent quarter compared to 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, CAVIUM INC reported poor results of -$0.29 versus -$0.06 in the prior year. This year, the market expects an improvement in earnings ($1.58 versus -$0.29).
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, CAVIUM INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $12.46 million or 27.26% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, CAVIUM INC has marginally lower results.

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