Applied Materials, Inc. (NASDAQ:AMAT) Trading Ideas: Be Fearful When Others Are Greedy

Taking into account all relevant factors, Applied Materials, Inc. (NASDAQ:AMAT) scores 100% Buy on the technical side. The share price is also flashing a Buy from the Barchart TrendSpotter trading system. Investors starting out on a short-term path of investing should know that short terms indicators for AMAT averaged 100% Buy with an average daily trading volume over the past 20 days at 5588624 shares. Those using medium-term investment strategies, the shares have overall a 1% Buy signal while the 50-day average daily volume remained almost 6940339 shares. It’s also important to note that the stock, whose average daily volume over the 100 days as of this piece was 6941704 shares, is signaling100% Buy for long term investors.

The stock is lingering around the initial support level of $61.4. After this, the following support is at the zone of $60.87. Up until the time the AMAT stock hit levels beyond the current one, bulls should have no alarm. In terms of its momentum, the stock’s RSI hit 58.67 on the daily chart, and this may be a cause for concern. In case the price goes below $60.87 level on closing basis, there may be more profit booking with the stock growing weaker. Still, getting to the $62.41 level may cause a pull-back move approaching $62.9 mark.

Let’s take a glimpse at some insider activity at Applied Materials, Inc. (NASDAQ:AMAT) and observe the pattern. The earliest insider trade happened on 12/16/2019. Raja Prabu G. parted with a total of 50 thousand shares of the firm at average share price of $60.73. The total amount for the sale was set at $3.04 million. On completing this exchange, the SVP, Semi. Products Group account balance was 504.33 thousand shares. The stock grew 3.75 percent from that insider sale. On 11/19/2019, DICKERSON GARY E, President and CEO, did a sale of 1 million shares at a price of $61.11 per share. This got rid of 61.11 million shares from the insider’s fortune and the stock experienced a 3.11 percent rally in price since the news became public. This exchange saw 2.27 million shares get out from the President and CEO account. On 11/18/2019, Director Forrest Stephen R recorded a sale transaction valued at $188.58 thousand. The sale at $62.86 a share has eliminated 3 thousand shares from the insider’s portfolio position. Meanwhile, shares price witnessed 0.24 percent increase since the transaction reporting date. The company insider is left with 72.96 thousand shares remaining in the account. Ghanayem Steve G., who works as SVP, New Mrkts & Alliances Grp at the company, performed a sale of 25.73 thousand shares in a transaction worth $1.34 million. The disposal recorded on 09/24/2019 was priced at $52.12 per share. The stock price soared 20.89 percent since the transaction. Ghanayem Steve G. currently holds a stake of 460.75 thousand in AMAT stock which is worth $29.03 million after the insider selling.

In the recent trading session, Applied Materials, Inc. (NASDAQ:AMAT) shares gained 1.73% or 1.07 points to reach at $63 with a thin trading volume of 956.857 thousand shares. It opened the trading session at $62.3, the shares rose to $62.365 and dropped to $61.35, the range by which the price of stock traded the whole session. The company now has a market cap of $57.2 billion and currently has 922.75 million outstanding shares. Applied Materials, Inc. (AMAT) stock has accumulated 3.44 percent of market value in 21 trading days.

Stock analysts at BofA/Merrill upped their rating on shares of Applied Materials, Inc. (NASDAQ:AMAT) from Neutral to a new rating of Buy in their opinion released on January 10. UBS analysts have downgraded their rating of AMAT shares from Neutral to Sell in a separate flash note to investors on November 21. Analysts at Nomura issued an upgrade for the stock to Buy from previous rating of Neutral, in a research note that dated back to November 15.

AMAT stock’s trailing 3-year beta is 1.63, meaning there will be a greater rate of return, although posing a higher risk. The part of a firm’s profit given to each outstanding share of regular stock was $2.84 share in the trailing 52 weeks. The stock’s value surged 1.46 percent year to date (YTD) compared to a rise of 83.5 percent in 52 week’s period. The firm’s shares are still trading -0.86 percent below its 1-year high of $63.54 and 89.47 percent up from 52-week low of $33.25. The average consensus ranking on the company is 2.2, on a ranging where 5 is equal to a consensus sell rating. In other words, the mean analyst recommendations are ranking this stock as a sell.

Applied Materials, Inc. (AMAT) shares are trading at a P/E ratio of 21.66 times earnings posted in the trailing 12 months. The industry AMAT deals with has an average P/E of 34.7. Its P/B ratio is standing at 6.85X compared to the 7.85 industry average. It is additionally sporting a 3.49 on the Price-to-Sales ratio, compared to the industry’s P/S average of 0.9. Applied Materials, Inc. has a 43.7% gross profit margin, with its operating margin around 22.9%. Alongside this, the company’s net profit margin currently stands at 18.5%.

Past records have indicated that shares in Applied Materials, Inc. rose on 23 different earnings reaction days and we have yet to see whether this trend will play out and remain in place when the company reports upcoming earnings.