Stock To Watch: Freescale Semiconductor (FSL) In Perilous Reversal

Trade-Ideas LLC identified Freescale Semiconductor ( FSL) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Freescale Semiconductor as such a stock due to the following factors:

  • FSL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $29.4 million.
  • FSL has traded 133,036 shares today.
  • FSL is down 3.1% today.
  • FSL was up 6.2% yesterday.

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More details on FSL:

Freescale Semiconductor, Ltd. provides embedded processors worldwide. FSL has a PE ratio of 31. Currently there are 3 analysts that rate Freescale Semiconductor a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Freescale Semiconductor has been 1.6 million shares per day over the past 30 days. Freescale Semiconductor has a market cap of $11.9 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.51 and a short float of 6.4% with 6.13 days to cover. Shares are up 60.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Freescale Semiconductor as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 14.7%. Since the same quarter one year prior, revenues slightly increased by 0.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • FREESCALE SEMICONDUCTOR LTD has improved earnings per share by 35.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, FREESCALE SEMICONDUCTOR LTD turned its bottom line around by earning $0.80 versus -$0.81 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $0.80).
  • The gross profit margin for FREESCALE SEMICONDUCTOR LTD is rather high; currently it is at 51.67%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, FSL's net profit margin of 10.18% significantly trails the industry average.
  • Powered by its strong earnings growth of 35.71% and other important driving factors, this stock has surged by 142.29% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.

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