PMC-Sierra (PMCS) Moving On Heavy Volume In The Pre-Market Hours

Trade-Ideas LLC identified PMC-Sierra ( PMCS) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified PMC-Sierra as such a stock due to the following factors:

  • PMCS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $111.2 million.
  • PMCS traded 2.6 million shares today in the pre-market hours as of 8:24 AM, representing 28.3% of its average daily volume.

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More details on PMCS:

PMC-Sierra, Inc. designs, develops, markets, and supports semiconductor solutions for communications network infrastructure equipment worldwide. Its semiconductor devices enable networking equipment primarily in three markets, including storage, optical, and mobile networks. PMCS has a PE ratio of 289. Currently there are no analysts that rate PMC-Sierra a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for PMC-Sierra has been 7.0 million shares per day over the past 30 days. PMC-Sierra has a market cap of $2.2 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.02 and a short float of 4.1% with 0.64 days to cover. Shares are up 27.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates PMC-Sierra as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from the ratings report include:
  • PMCS's debt-to-equity ratio is very low at 0.07 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 1.10, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $33.38 million or 17.52% when compared to the same quarter last year. In addition, PMC-SIERRA INC has also vastly surpassed the industry average cash flow growth rate of -84.30%.
  • PMC-SIERRA INC 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, PMC-SIERRA INC turned its bottom line around by earning $0.00 versus -$0.16 in the prior year. This year, the market expects an increase in earnings to $0.46 from $0.00.
  • Compared to its closing price of one year ago, PMCS's share price has jumped by 65.72%, exceeding the performance of the broader market during that same time frame. 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.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 146.5% when compared to the same quarter one year ago, falling from -$3.48 million to -$8.58 million.

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