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 "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 InvenSense as such a stock due to the following factors:
- INVN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $47.8 million.
- INVN has traded 2.4 million shares today.
- INVN traded in a range 205.3% of the normal price range with a price range of $1.50.
- INVN traded above its daily resistance level (quality: 530 days, meaning that the stock is crossing a resistance level set by the last 530 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 INVN:
InvenSense, Inc. designs, develops, markets, and sells micro-electro-mechanical system (MEMS) gyroscopes for motion tracking devices in consumer electronics. INVN has a PE ratio of 323.6. Currently there are 7 analysts that rate InvenSense a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for InvenSense has been 2.1 million shares per day over the past 30 days. InvenSense has a market cap of $2.0 billion and is part of the technology sector and electronics industry. The stock has a beta of 3.35 and a short float of 34.5% with 12.73 days to cover. Shares are up 9% year-to-date as of the close of trading on Thursday.
rates InvenSense 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and premium valuation.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.5%. Since the same quarter one year prior, revenues slightly increased by 6.9%. 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.
- Despite currently having a low debt-to-equity ratio of 0.43, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 4.94 is very high and demonstrates very strong liquidity.
- The gross profit margin for INVENSENSE INC is rather high; currently it is at 51.07%. Regardless of INVN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, INVN's net profit margin of -9.54% significantly underperformed when compared to the industry average.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, INVENSENSE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full InvenSense Ratings Report.