Microchip Technology (MCHP) Falls Further As It's Water-Logged And Getting Wetter
Trade-Ideas LLC identified
(
) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Microchip Technology as such a stock due to the following factors:
- MCHP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $100.6 million.
- MCHP has traded 891,957 shares today.
- MCHP traded in a range 238.4% of the normal price range with a price range of $2.44.
- MCHP traded below its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on MCHP:
Microchip Technology Incorporated develops, manufactures, and sells semiconductor products for various embedded control applications. The stock currently has a dividend yield of 2.9%. MCHP has a PE ratio of 26. Currently there are 3 analysts that rate Microchip Technology a buy, no analysts rate it a sell, and 4 rate it a hold.
The average volume for Microchip Technology has been 2.5 million shares per day over the past 30 days. Microchip Technology has a market cap of $10.3 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.92 and a short float of 9.7% with 9.03 days to cover. Shares are up 8.6% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Microchip Technology as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, increase in net income, good cash flow from operations and growth in earnings per share. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 12.9%. Since the same quarter one year prior, revenues slightly increased by 0.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. 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 45.3% when compared to the same quarter one year prior, rising from $89.91 million to $130.67 million.
- Net operating cash flow has slightly increased to $181.53 million or 9.49% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -30.92%.
- MICROCHIP TECHNOLOGY INC reported significant earnings per share improvement 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, MICROCHIP TECHNOLOGY INC reported lower earnings of $1.66 versus $1.81 in the prior year. This year, the market expects an improvement in earnings ($2.60 versus $1.66).
- You can view the full Microchip Technology Ratings Report.
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