The Buy for Applied Materials (AMAT) this week is based on the most recent relative pricing of its shares and SEC filings. The reasoning behind Applied Materials Inc's (NASDAQ:AMAT) current Buy recommendation is a ranking in the company's sector group that is in the top third, a ranking in its industry group that is in the top third, a numerical calculation of risk/reward that is attractive, and analytical scoring that is near average. As a member of a sector that is ranked well above average in investment attractiveness is a plus from a recommendation perspective; however, its industry group is ranked above average in attractiveness which may offset this to a degree. AMAT has maintained this ranking for the last month.
The company is a $62.1 billion in market value constituent of the Electronic Production Equipment GICS industry group where the ranking for AMAT by Portfolio Grader places it 12 among the 39 companies in this industry group, giving it an above-average position. AMAT is ranked in the top half of the sector with a ranking of 105 among the 373 companies in the sector of its Electronic Technology sector and 1,152 in the Portfolio Grader company universe.
Portfolio Grader currently ranks the Electronic Technology sector number 4 among the 20 sectors in its universe putting it in the top quartile of all the GICS sectors. The Electronic Production Equipment industry group is ranked 43 among the 129 industry groups within the GICS sectors, placing it near the average in terms of the Proprietary Quantitative Score scoring system.
AMAT has realized above-average scores in 4 of the 8 fundamental areas analyzed by Portfolio Grader and average or below-average grades in 4 of the areas used in the ranking of company stocks.
AMAT's operational scores provide mixed results with a ranking for sales growth that is well above the industry average but rankings for operating margin and earnings growth are below average. Scores for visibility of earnings are mixed, with a ranking for earnings revisions and earnings surprises that are better than average, while the score for earnings momentum is much worse than average. AMAT's ranking for return on equity is significantly better than its industry group average but its grade for cash flow is below-average. Applied Materials' fundamental scores give AMAT a place in the third quartile of the industry group.
Portfolio Grader quantitatively gauges AMAT's shares using the Proprietary Quantitative Score. This metric looks at AMAT's shares from the aspect of risk/reward. This exclusive scoring approach assesses the relative value of the company's shares based on the recent $58.81 share price of the shares relative to its peers, the market and risk associated with its industry and sector groups. Considering this risk/reward calculation, AMAT currently scores above-average in its industry group compared to its peers.
The Proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results, with A being 'strong buy' and F being 'strong sell'. Explore the tool here.
Commentary provided by UpTick Data Technologies.
