Is It Worthwhile For Investors To Follow These Insider Trades On Applied Materials Inc. (AMAT)?

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Applied Materials Inc. (NASDAQ:AMAT) finished Thursday with an addition of $2.92 to close at $97.14, an upside of 3.09 percent. An average of 6,309,440 shares of common stock have been traded in the last five days. There was a fall of -$8.76 in the past week, and it reached a new high 4 times over the past 12 months. The last 20 days have seen an average of 6,230,295 shares traded, while the 50-day average volume stands at 7,759,972.

AMAT stock has decreased by -5.92% in the last month. The company shares reached their 1-month lowest point of $93.68 on 12/28/22. With the stock rallying to its 52-week high on 01/14/22, shares of the company touched a low of $71.12 and a high of $167.06 in 52 weeks. It has reached a new high 4 times so far this year and lost -38.27% or -$60.22 in price. In spite of this, the price is down -41.85% from the 52-week high.

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Insider Transactions

AMAT stock investors should be aware that Applied Materials Inc. (AMAT) stock had its last reported insider trading activity 107 days ago on Sep 14. In this transaction, the insider spent $2,652. SVP, CLO, Little Teri A., disposed of 10,000 shares at a price of $89.50 on Jul 07. The insider now owns more than $895,000 worth of shares. Prior to that, SVP, CLO Little Teri A. went on to Sale 15,000 shares at $86.30 each on Jul 06. An amount of $1,294,500 was transacted.

Valuation Metrics

Applied Materials Inc. (AMAT) has a trailing price-to-earnings (P/E) ratio of 13.06. The stock’s beta is 1.56. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 3.19, the price-to-book (PB) ratio at 6.79, and the price-to-cash flow ratio at 22.02.

The company has a payout ratio of 9.90%. The company’s most recent quarterly dividend payment was $0.26 a share, without any change from last year. Its latest increase dividend $0.02 reported on Friday March 11 2022.

Financial Health

The quick ratio of Applied Materials Inc. for the three months ended July 30 was 1.40, and the current ratio was 2.20, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.45 and a total debt to equity ratio of 0.45 for the quarter ending July 30. Its gross profit as reported stood at $11.99 billion compared to revenue of $25.79 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Applied Materials Inc.’s return on assets was 25.20%.

Earnings Surprise

For the three-month period that ended July 30, Applied Materials Inc. had $586.0 million in cash and short-term investments compared to $5.46 billion in total debt. In the quarter under review, the net income was up than the previous quarter. The company posted a net income of $1.59 billion in the quarter, while revenues of $1.61 billion were shrunk -7.61%. The analyst consensus anticipated Applied Materials Inc.’s latest quarter earnings to come in at $1.79 per share, but it turned out to be $1.94, a 8.40% surprise. For the quarter, EBITDA amounted to $2.12 billion. Shareholders own equity worth $844.14 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Applied Materials Inc. (AMAT) price momentum. RSI 9-day as of the close on 29 December was 37.93%, suggesting the stock is Neutral, with historical volatility in this time frame at 47.22%.

As of today, AMAT’s price is $96.31 -8.27% or -$8.76 from its 5-day moving average. AMAT is currently trading -11.37% lower than its 20-day SMA and -9.91% lower than its 100-day SMA. However, the stock’s current price level is +29.12% above the SMA50 and -21.92% below the SMA200.

The stochastic %K and %D were 6.24% and 5.57%, respectively, and the average true range (ATR) was 3.64. With the 14-day stochastic at 15.46% and the average true range at 3.77, the RSI (14) stands at 42.12%. The stock has reached -4.39 on the 9-day MACD Oscillator while the 14-day reading was at -7.46.

Analyst Ratings

Loop Capital launched coverage on Applied Materials Inc. (NASDAQ: AMAT) in its analyst report released on December 07, 2022. The firm assigned the stock a Buy rating. The consensus rating for Applied Materials Inc. (AMAT) among analysts is Overweight. According to current brokerage recommendations, 0 brokerage firms advise that investors sell AMAT, while 8 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 2 analysts, while 21 others rate it as a “buy”.

What is AMAT’s price target for the next 12 months?

Analysts predict a range of price targets between $80.00 and $140.00, with a median target of $120.00. Taking a look at these predictions, the average price target given by analysts for Applied Materials Inc. (AMAT) stock is $118.28.

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