Chart Of The Day: Cadence Solves System Design Enablement Problems

macro photography of black circuit board

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The Chart of the Day belongs to the software solutions company Cadence Design Systems (CDNS). I found the stock by using Barchart's powerful screening functions to find stocks with the highest technical buy signals, highest Weighted Alpha, superior current momentum, and having a Trend Seeker buy signal then used the Flipchart feature to review the charts for consistent price appreciation.  Since the Trend Seeker signaled a buy on 1/17 the stock gained 18.44%.

(Click on image to enlarge)

CDNS Price vs Daily Moving Averages

Cadence Design Systems, Inc. provides software, hardware, services, and reusable integrated circuit (IC) design blocks worldwide. The company offers functional verification services, including emulation and prototyping hardware. Its functional verification offering consists of JasperGold, a formal verification platform; Xcelium, a parallel logic simulation platform; Palladium, an enterprise emulation platform; and Protium, a prototyping platform for chip verification. The company also provides digital IC design and sign-off products, including Genus logic synthesis and Joules RTL power solutions, as well as Modus software solutions to reduce systems-on-chip design-for-test time; physical implementation tools, such as place and route, optimization, and multiple patterning preparations; and Innovus implementation system, a physical implementation system. In addition, it offers custom IC design and simulation products to create schematic and physical representations of circuits down to the transistor level for analog, mixed-signal, custom digital, memory, and radio frequency designs; and system design and analysis products to develop printed circuit boards and IC packages, as well as to analyze electromagnetic, electro-thermal, and other multi-physics effects. Further, the company provides intellectual property (IP) products comprising pre-verified and customizable functional blocks to integrate into customers' ICs; and verification IP with memory models to emulate and model the expected behavior and interaction of standard industry system interface protocols. Additionally, it offers services related to methodology, education, and hosted design solutions, as well as technical support and maintenance services. The company serves 5G communications, aerospace and defense, automotive, industrial and healthcare, mobile, consumer, and hyper-scale computing markets. Cadence Design Systems, Inc. was incorporated in 1987 and is headquartered in San Jose, California.

Barchart's Opinion Trading systems are listed below. Please note that the Barchart Opinion indicators are updated live during the session every 20 minutes and can therefore change during the day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the website when you read this report.

Barchart Technical Indicators:

  • 100% technical buy signals
  • 38.20+Weighted Alpha
  • 31.08% gain in the last year
  • Trend Seeker buy signal
  • Above its 20, 50, and 100-day moving averages
  • 10 new highs and up 4.86% in the last month
  • Relative Strength Index 63.13%
  • Recently traded at $206.08 with a 50-day moving average of $199.35.

Fundamental Factors:

  • Market Cap $56.68 billion
  • P/E 62.24
  • Revenue is expected to grow 13.40% this year and another 10.40% next year
  • Earnings are estimated to increase 16.60% this year and an additional 12.20% next year and continue to compound at an annual rate of 17.68% for the next 5 years

Analysts and Investor Sentiment -- I don't buy stocks because everyone else is buying but I do realize that if major firms and investors are dumping a stock it's hard to make money swimming against the tide:

  • Wall Street analysts issued 10 strong buy, 1 buy, 3 hold, and 1 sell opinions on the stock
  • Their price targets are $161 to $235
  • The individual investors following the stock on Motley Fool vote 306 to 38 for the stock to beat the market with the more experienced investors voting 61 to 3 for the same result
  • Value Line gives it an average rating of 3 and has a price target of $135 to $277
  • CFRAs MarketScope has a buy rating with a 12-month price target of $232
  • 18,060 investors monitor the stock on Seeking Alpha

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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the ...

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