Seriously long on Cirrus Logic (CRUS)In the past 2 months, Cirrus Logic's share price has fallen. This trading idea focuses on buying the stock, as it is expected to have long-term growth potential.
Strategy
The strategy for this trading idea is based on the following factors:
EBIT: Cirrus Logic's EBIT (Earnings Before Interest and Taxes) is currently at $34.85. EBIT is calculated by subtracting a company's cost of goods sold (COGS) and its operating expenses from its revenue. A higher EBIT indicates better profitability.
Capital Expenditure: Positive capital expenditure suggests that a company is investing in its growth and expansion.
Short Term Debt: Low short term debt indicates lower financial risk and a better ability to meet short-term obligations.
Total Liabilities: Low total liabilities indicate a healthier balance sheet.
Core Logic
This trading strategy aims to identify companies with long-term growth potential. By considering positive capital expenditure, low short term debt, low total liabilities, and an EBIT per revenue of greater than 23%, the trading idea seeks to find companies that are well-positioned for future growth.
Based on the provided facts, Cirrus Logic meets the criteria for this trading idea. With a current EBIT of $34.85, positive capital expenditure, and a healthy balance sheet, the stock shows potential for long-term growth.
Please note that this trading idea is suitable for investors with a moderately short investment horizon and a very high risk tolerance. As with any investment, it is important to conduct further research and analysis before making any trading decisions.
Technical Outlook
Cirrus Logic (CRUS) bulls are aiming to push the stock past a key resistance level at 60.75 as the next upside milestone if bulls maintain their dominance. Despite strong bullish sentiment, the price action of Cirrus Logic is still focused on testing its lower Bollinger Band® at 64.7.
In the most recent trading session, Cirrus Logic's share price appreciated by 1.51%, adding to its three-day uptrend. The stock has recovered almost all of the session losses it suffered yesterday when it dipped down to $66.2.
Cirrus Logic is currently trading with a market cap of $3.72 billion, and 1.15 million shares were traded on the day, above the multiday average of 484,357.
It seems that Cirrus Logic's price action will continue to focus on testing its lower Bollinger Band® at 64.7, despite strong bullish sentiment. However, there is a key resistance level at 60.75 that the stock is approaching, now only $1.79 away. A break above this level could open up a new path for further gains in the short-term.
Following today's strong gains and reaching as high as $69.82, extensive multifactorial technical analysis forecasts that Cirrus Logic will extend its strong run further in the short-medium term. With all probabilities considered, the Texan semiconductor supplier is expected to appreciate amid a risk-on mood in the coming days.
Despite strong bullish sentiment in the market, technical analysis classifies Cirrus Logic as a "Strong Buy."
