New Lifetime High Today: Microchip Technology (MCHP)
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
(
) as a new lifetime high 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 $132.4 million.
- MCHP has traded 47,951 shares today.
- MCHP is trading at a new lifetime high.
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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 2.8%. MCHP has a PE ratio of 30.0. Currently there are 2 analysts that rate Microchip Technology a buy, no analysts rate it a sell, and 5 rate it a hold.
The average volume for Microchip Technology has been 2.8 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 1.01 and a short float of 13.7% with 9.31 days to cover. Shares are up 14.1% year-to-date as of the close of trading on Thursday.
Analysis:
rates Microchip Technology as a
. 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, good cash flow from operations, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.7%. Since the same quarter one year prior, revenues slightly increased by 9.6%. 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.
- The debt-to-equity ratio is somewhat low, currently at 0.60, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 3.87, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has increased to $184.84 million or 20.12% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -16.11%.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
- MICROCHIP TECHNOLOGY INC's earnings per share declined by 18.8% 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 increased its bottom line by earning $1.81 versus $0.61 in the prior year. This year, the market expects an improvement in earnings ($2.66 versus $1.81).
- You can view the full Microchip Technology Ratings Report.
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