Advanced Micro Devices Inc. (AMD) Clearly Signals Buy-Into the Stock: Don’t ignore the signals

Advanced Micro Devices Inc. (NASDAQ: AMD) stock jumped 9.22% on Monday to $76.53 against a previous-day closing price of $70.07. With 84.05 million shares changed hands, the volume of the stock remained heavier than its average volume of 65.53 million shares. During the session, the Semiconductors company that operates in wider Technology sector, reached to the highest price of $76.59 whereas the lowest price it dropped to was $71.54. The 52-week range on AMD shows that it touched its highest point at $132.96 and its lowest point at $54.57 during that stretch. It currently has a 1-year price target of $91.01. Beta for the stock currently stands at 1.97.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of AMD was up-trending over the past week, with a rise of 7.79%, but this was up by 17.65% over a month. Three-month performance surged to 32.47% while six-month performance fell -13.13%. The stock lost -37.21% in the past year, while it has gained 18.16% so far this year. A look at the trailing 12-month EPS for AMD yields 1.67 with Next year EPS estimates of 3.61. For the next quarter, that number is 0.67. This implies an EPS growth rate of 24.70% for this year and 2.67% for next year. EPS is expected to grow by 14.30% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 44.60%.

Float and Shares Shorts:

At present, 1.61 billion AMD shares are outstanding with a float of 1.61 billion shares on hand for trading. On Oct 13, 2022, short shares totaled 37.93 million, which was 2.35% higher than short shares on Sep 14, 2022. In addition to Dr. Lisa T. Su Ph.D. as the firm’s Pres, CEO & Chair of the Board, Mr. Devinder Kumar serves as its Exec. VP, CFO & Treasurer.

Institutional Ownership:

Through their ownership of 68.28% of AMD’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 5.60% of AMD, in contrast to 39.72% held by mutual funds. Shares owned by individuals account for 31.05%. As the largest shareholder in AMD with 7.93% of the stake, The Vanguard Group, Inc. holds 127,905,672 shares worth 127,905,672. A second-largest stockholder of AMD, BlackRock Fund Advisors, holds 76,772,178 shares, controlling over 4.76% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in AMD, holding 65,895,754 shares or 4.09% stake. With a 3.04% stake in AMD, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 49,036,817 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 2.31% of AMD stock, is the second-largest Mutual Fund holder. It holds 37,270,029 shares valued at 2.41 billion. Invesco QQQ Trust holds 1.33% of the stake in AMD, owning 21,461,791 shares worth 1.39 billion.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for AMD since 42 analysts follow the stock currently. There are 27 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 10 believe that the stock is worth HOLDING, 5 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With AMD analysts setting a high price target of $200.00 and a low target of $60.00, the average target price over the next 12 months is $88.08. Based on these targets, AMD could surge 161.34% to reach the target high and fall by -21.6% to reach the target low. Reaching the average price target will result in a growth of 15.09% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. AMD will report FY 2022 earnings on 01/30/2024. Analysts have provided yearly estimates in a range of $3.64 being high and $3.39 being low. For AMD, this leads to a yearly average estimate of $3.51. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Advanced Micro Devices Inc. surprised analysts by -$0.02 when it reported $0.67 EPS against a consensus estimate of $0.69. The surprise factor in the prior quarter was $0.02. Based on analyst estimates, the high estimate for the next quarter is $0.71 and the low estimate is $0.58. The average estimate for the next quarter is thus $0.67.

Summary of Insider Activity:

Insiders traded AMD stock several times over the past three months with 1 Buys and 3 Sells. In these transactions, 528,457 shares were bought while 219,002 shares were sold. The number of buy transactions has increased to 39 while that of sell transactions has risen to 47 over the past year. The total number of shares bought during that period was 4,166,394 while 2,045,350 shares were sold.

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