Below are interesting large-cap stocks on the NYSE and the NASDAQ with the lowest PEG ratio.
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Traders watch earnings filingswith particular interest, as changes in a company’s ratios can be a good indication whether a company is on the right track, or headed the wrong way.
Vimicro International Corp. (VIMC) is scheduled to release its earnings results Monday. The company currently has an earnings per share ratio (EPS trailing twelve months) of - .76 and investors are hoping to see that number change. Let’s take a look at the performance of the stock since its previous earnings release.
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In the past three months, the stock has posted a 43.84% gain in terms of stock price. Over the same period, the Semiconductor - Specialized industry group has returned a combined 3.68% gain.
So the eyes of investors turn to this new round of earnings.
Now, good earnings don’t always lead to higher stock prices, but keeping up on earnings is still a vital part of your fundamental stock analysis. Also note that companies often change earnings dates, so you should double-check them often.
When looking at earnings, it’s very helpful to see how stocks compare to others in its industry group. And even though two stocks may not be direct competitors, many analysts and institutional investors still compare them and evaluate them relative to other stocks in their group.
VIMC is in the Semiconductor - Specialized industry group where it competes for investor dollars with companies like Trident Microsystems Inc. (TRID), which released its earnings on 10/26 and last reported a 15.67% gain in quarter-over-quarter EPS.
Another industry peer, NVE Corp. (NVEC) released its earnings on 10/21 and last reported a 15.15% gain in QOQ EPS.
First Solar, Inc.(FSLR) is the stock with the biggest market cap in the Semiconductor - Specialized industry at $10.61B. It closed yesterday at $124.67
To better understand how to evaluate earnings announcements and the affect they have on your portfolio, be sure to read Earnings Announcements and EPS.
November 18, 2009 ndash; Analyst Comments- Pacificnbsp; Crestrsquo;s Mark Bachman commented today on an article in the October 2009 issue of PHOTON Magazine which reports on manufacturing flaws in First Solar modules. Bachman stated that ldquo;We raise the issue now because the article was printed in the German version of the magazine last month, and we believe that most U.S. investors are not yet aware of it; we suspect the article will soon appear in the English version of PHOTON International. We are looking to be more constructive on the stock and want to clear potential negative data ahead of First Solarrsquo;s Dec. 16 analyst meeting.rdquo;
Key Takeaways
Bachman said module performance is unaffected by the defects, having checked with several First Solar customers
Doesnrsquo;t think that First Solarrsquo;s brand has been damaged, as no negative criticism was noted from checks with installers in the U.S.
RBC Capital Mkts gave the Semiconductor - Specialized industry some good news as it announced an upgrade on one of its stocks.
First Solar, Inc. (FSLR) [Chart - News - Analysis] was upgraded from Sector Perform » Outperform on 11/18/2009---a positive sign for the stock that investors typically welcome. FYI, RBC Capital Mkts uses the following rating scale when analyzing stocks: Top Pick, Outperform, Sector Perform, Underperform.
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First Solar, Inc. has an average analyst recommendation score of 2.6 and competes for investment dollars with Silicon Laboratories, Inc. (SLAB) [Chart - News - Analysis] and ARM Holdings plc (ARMH) [Chart - News - Analysis]---two other stocks in the Semiconductor - Specialized industry that have average analyst recommendation scores of 1.8 and 2.3 respectively.
Analyst recommendations are averaged and scored using the following rating scale:
- 1.0 = Strong Buy
- 2.0 = Buy
- 3.0 = Hold
- 4.0 = Sell
- 5.0 = Strong Sell
Why are Upgrades and Initiations Good and Downgrades Bad?
One event that is almost certain to get a reaction from Wall Street is an analyst upgrade or downgrade. Everyone is looking for an edge in the stock market, and quite often, traders turn to stock analysts to get that edge.
Upgrades and coverage initiations are typically good for stocks because they show that analysts either believe that the stock is going to perform better in the future or that the stock is worth covering and providing analysis on.
Downgrades are typically bad for stocks because they show that analysts believe that the stock is going to perform worse in the future.
A stock analysts is a person---typically employed by a large bank, investment firm or analysis company---who devotes his/her life to learning and making predictions about a company and its future performance.
Stock analysts sift through company reports and filings, talk to company management, probe customers and competitors and basically do whatever they can to find out if a company is healthy and growing or sick and shrinking. Because this is incredibly demanding work, stock analysts typically only monitor one or two companies at a time.
Companies featured in this segment: Vale SA (NYSE:VALE), PolyOne Corporation (NYSE:POL), HSBC Holdings plc (NYSE:HBC), The AES Corporation (NYSE:AES), First Solar Incorporated (NYSE:FSLR), NTPC Limited (BSE:532555), Electrotherm India Limited (BSE:526608), Abengoa SA (MCE:ABG), E.ON AG (OTC:EONGY), BMW AG (ETR:BMW)
Companies featured in this segment: First Solar Incorporated (NASDAQ:FSLR), Edison International (NYSE:EIX), OAO Gazprom (OTC:OGZPY), Iberdrola SA (MCE:IBE), CEZ AS (PRG:BAACEZ), Enel SpA (BIT:ENEL), Fortum Oyj (HEL:FUM1V)
Companies featured in this segment: BP Plc (NYSE:BP), First Solar Incorporated (NASDAQ:FSLR), Siemens AG (NYSE:SI), ArcelorMittal (NYSE:MT), StatoilHydro ASA (NYSE:STO), Technip SA (EPA:TEC), Nexans SA (EPA:NEX), Enova Systems Incorporated (LSE:ENV), Q-Cells SE (ETR:QCE), SolarWorld AG (ETR:SWV), ErSol Solar Energy AG (ETR:ES6), and Neste Oil Corporation (HEL:NES1V)
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