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

Cirrus Logic

(

CRUS

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Cirrus Logic as such a stock due to the following factors:

  • CRUS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.8 million.
  • CRUS has traded 152,074 shares today.
  • CRUS is up 3.7% today.
  • CRUS was down 12% yesterday.

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More details on CRUS:

Cirrus Logic, Inc., a fabless semiconductor company, develops analog and mixed-signal integrated circuits (ICs) for a range of consumer and industrial markets. CRUS has a PE ratio of 14.7. Currently there is 1 analyst that rates Cirrus Logic a buy, 3 analysts rate it a sell, and 2 rate it a hold.

TheStreet Recommends

The average volume for Cirrus Logic has been 798,500 shares per day over the past 30 days. Cirrus Logic has a market cap of $1.4 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.85 and a short float of 13.8% with 4.64 days to cover. Shares are up 7.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Cirrus Logic as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:

  • CRUS 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 3.87, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for CIRRUS LOGIC INC is rather high; currently it is at 52.09%. Regardless of CRUS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CRUS's net profit margin of 6.71% is significantly lower than 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 Semiconductors & Semiconductor Equipment industry and the overall market on the basis of return on equity, CIRRUS LOGIC INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 50.4% when compared to the same quarter one year ago, falling from $20.64 million to $10.25 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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