Visteon (VC) Stock Revved Up for a 10% Boost
NEW YORK (TheStreet) -- The tape is confusing. There are some names breaking down and others, like tech company Visteon (VC) - Get Report , breaking out on the upside.
VC has been in a $95 to $110 trading range for much of the past 12 months. The stock just broke out over $110, with a strong and leading On-Balance-Volume (OBV) line and bullishly aligned (shorter moving average above the longer moving average) rising 50-day and 200-day moving averages.
This longer view, above, of VC shows a great uptrend and lengthy consolidation. Note the smooth and rising OBV line. The Moving Average Convergence Divergence oscillator is in a bullish configuration, crossing back above the zero line. The height of the consolidation on VC is $15 ($95 to $110), so that is added to the breakout at $110 -- giving us a $125 price target. Look to buy a dip of $1 to $2 in the next couple of days and use a sell-stop below $110.
TheStreet Ratings team rates VISTEON CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
We rate VISTEON CORP (VC) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- VC's very impressive revenue growth greatly exceeded the industry average of 12.6%. Since the same quarter one year prior, revenues leaped by 61.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- VC's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.60, which clearly demonstrates the ability to cover short-term cash needs.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Auto Components industry. The net income increased by 1524.5% when compared to the same quarter one year prior, rising from -$155.00 million to $2,208.00 million.
- Net operating cash flow has remained constant at $31.00 million with no significant change when compared to the same quarter last year. Along with maintaining stable cash flow from operations, the firm exceeded the industry average cash flow growth rate of -31.22%.
- 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. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: VC
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.