Trade-Ideas: EZChip Semiconductor (EZCH) 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 EZChip Semiconductor (EZCH) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified EZChip Semiconductor as such a stock due to the following factors:
- EZCH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.7 million.
- EZCH has traded 1.9 million shares today.
- EZCH is up 6.1% today.
- EZCH was down 5.8% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in EZCH with the Ticky from Trade-Ideas. See the FREE profile for EZCH NOW at Trade-IdeasMore details on EZCH: EZchip Semiconductor Ltd., a fabless semiconductor company, engages in the development and marketing of Ethernet network processors for networking equipment. EZCH has a PE ratio of 45.4. Currently there are 4 analysts that rate EZChip Semiconductor a buy, no analysts rate it a sell, and 3 rate it a hold.The average volume for EZChip Semiconductor has been 251,900 shares per day over the past 30 days. EZChip Semiconductor has a market cap of $703.4 million and is part of the technology sector and electronics industry. The stock has a beta of 1.13 and a short float of 10.2% with 2.58 days to cover. Shares are down 25.9% year to date as of the close of trading on Friday.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 EZChip Semiconductor as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.Highlights from the ratings report include:
- Since the same quarter one year prior, revenues slightly increased by 5.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- EZCH has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 27.77, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has decreased to $7.06 million or 21.75% when compared to the same quarter last year.
- EZCHIP SEMICONDUCTOR LTD's earnings per share declined by 5.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EZCHIP SEMICONDUCTOR LTD increased its bottom line by earning $0.54 versus $0.27 in the prior year. This year, the market expects an improvement in earnings ($1.16 versus $0.54).
- The net income has decreased by 7.3% when compared to the same quarter one year ago, dropping from $5.55 million to $5.15 million.
- You can view the full EZChip Semiconductor 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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