Trade-Ideas: ON Semiconductor (ON) Is Today's "Barbarian At The Gate" Stock

Trade-Ideas LLC identified ON Semiconductor (ON) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

ON Semiconductor

(

ON

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified ON Semiconductor as such a stock due to the following factors:

  • ON has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.3 million.
  • ON has traded 950,419 shares today.
  • ON traded in a range 201.2% of the normal price range with a price range of $0.50.
  • ON traded above its daily resistance level (quality: 209 days, meaning that the stock is crossing a resistance level set by the last 209 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on ON:

ON Semiconductor Corporation manufactures and sells semiconductor components for various electronic devices worldwide. ON has a PE ratio of 21. Currently there are 8 analysts that rate ON Semiconductor a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for ON Semiconductor has been 4.4 million shares per day over the past 30 days. ON Semiconductor has a market cap of $4.0 billion and is part of the technology sector and electronics industry. The stock has a beta of 2.02 and a short float of 2.8% with 4.53 days to cover. Shares are down 2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates ON Semiconductor as a

buy

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • Net operating cash flow has increased to $114.90 million or 37.60% when compared to the same quarter last year. In addition, ON SEMICONDUCTOR CORP has also vastly surpassed the industry average cash flow growth rate of -59.36%.
  • ON SEMICONDUCTOR CORP's earnings per share declined by 30.8% 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, ON SEMICONDUCTOR CORP increased its bottom line by earning $0.49 versus $0.43 in the prior year. This year, the market expects an improvement in earnings ($0.85 versus $0.49).
  • 40.69% is the gross profit margin for ON SEMICONDUCTOR CORP which we consider to be strong. Regardless of ON's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.40% trails the industry average.
  • ON, with its decline in revenue, underperformed when compared the industry average of 14.8%. Since the same quarter one year prior, revenues slightly dropped by 6.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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