Today's Dead Cat Bounce Stock Is Universal Display (OLED)
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 "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Universal Display as such a stock due to the following factors:
- OLED has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.8 million.
- OLED has traded 94,362 shares today.
- OLED is up 3.1% today.
- OLED was down 6.4% yesterday.
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More details on OLED:
Universal Display Corporation is engaged in the research, development, and commercialization of organic light emitting diode (OLED) technologies and materials for use in flat panel displays and solid-state lighting applications. OLED has a PE ratio of 40.8. Currently there are 3 analysts that rate Universal Display a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Universal Display has been 594,700 shares per day over the past 30 days. Universal Display has a market cap of $1.7 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 1.34 and a short float of 25% with 12.63 days to cover. Shares are up 23.9% year-to-date as of the close of trading on Friday.
Analysis:
rates Universal Display 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, notable return on equity and increase in stock price during the past year. 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 3.4%. Since the same quarter one year prior, revenues slightly increased by 0.2%. 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.
- OLED 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 14.61, which clearly demonstrates the ability to cover short-term cash needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, UNIVERSAL DISPLAY CORP's return on equity exceeds that of both the industry average and the S&P 500.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- UNIVERSAL DISPLAY CORP's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, UNIVERSAL DISPLAY CORP increased its bottom line by earning $1.59 versus $0.20 in the prior year. For the next year, the market is expecting a contraction of 16.4% in earnings ($1.33 versus $1.59).
- You can view the full Universal Display Ratings Report.
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