Trade-Ideas LLC identified

Microsemi

(

MSCC

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

  • MSCC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $35.6 million.
  • MSCC has traded 82,961 shares today.
  • MSCC is up 3.2% today.
  • MSCC was down 6.5% yesterday.

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More details on MSCC:

Microsemi Corporation designs, manufactures, and markets analog and mixed-signal semiconductor solutions in the United States, Europe, and Asia. MSCC has a PE ratio of 41. Currently there are 7 analysts that rate Microsemi a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Microsemi has been 618,600 shares per day over the past 30 days. Microsemi has a market cap of $3.5 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.85 and a short float of 2.2% with 2.04 days to cover. Shares are up 19.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Microsemi as a

buy

. 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, solid stock price performance, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 10.9%. Since the same quarter one year prior, revenues slightly increased by 8.4%. 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.
  • MSCC's debt-to-equity ratio of 0.82 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that MSCC's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.20 is high and demonstrates strong liquidity.
  • Compared to its closing price of one year ago, MSCC's share price has jumped by 38.55%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • MICROSEMI CORP's earnings per share declined by 23.5% 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, MICROSEMI CORP increased its bottom line by earning $0.88 versus $0.23 in the prior year. This year, the market expects an improvement in earnings ($3.20 versus $0.88).
  • 45.44% is the gross profit margin for MICROSEMI CORP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, MSCC's net profit margin of 7.69% is significantly lower than the industry average.

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