Trade-Ideas: OmniVision Technologies (OVTI) Is Today's "Dead Cat Bounce" Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.Trade-Ideas LLC identified OmniVision Technologies (OVTI) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified OmniVision Technologies as such a stock due to the following factors:
- OVTI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $41.0 million.
- OVTI has traded 10.1 million shares today.
- OVTI is up 3% today.
- OVTI was down 16.1% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in OVTI with the Ticky from Trade-Ideas. See the FREE profile for OVTI NOW at Trade-IdeasMore details on OVTI: OmniVision Technologies, Inc. engages in designing, developing, and marketing semiconductor image-sensor devices worldwide. OVTI has a PE ratio of 22.5. Currently there are 7 analysts that rate OmniVision Technologies a buy, no analysts rate it a sell, and 2 rate it a hold.The average volume for OmniVision Technologies has been 1.2 million shares per day over the past 30 days. OmniVision has a market cap of $998.5 million and is part of the technology sector and electronics industry. The stock has a beta of 2.06 and a short float of 10.5% with 2.24 days to cover. Shares are up 27.7% year to date as of the close of trading on Thursday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates OmniVision Technologies as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, increase in stock price during the past year and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.Highlights from the ratings report include:
- OVTI's very impressive revenue growth greatly exceeded the industry average of 13.4%. Since the same quarter one year prior, revenues leaped by 53.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- OVTI's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, OVTI has a quick ratio of 1.51, which demonstrates the ability of the company to cover short-term liquidity needs.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 232.8% when compared to the same quarter one year prior, rising from $2.68 million to $8.92 million.
- You can view the full OmniVision Technologies Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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