Trade-Ideas LLC identified

NeoPhotonics

(

NPTN

) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified NeoPhotonics as such a stock due to the following factors:

  • NPTN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.1 million.
  • NPTN has traded 201.8509999999999990905052982270717620849609375 options contracts today.
  • NPTN is making at least a new 3-day high.
  • NPTN has a PE ratio of 69.
  • NPTN is mentioned 1.06 times per day on StockTwits.
  • NPTN has not yet been mentioned on StockTwits today.
  • NPTN is currently in the upper 20% of its 1-year range.
  • NPTN is in the upper 35% of its 20-day range.
  • NPTN is in the upper 45% of its 5-day range.
  • NPTN is currently trading above yesterday's high.

TheStreet Recommends

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on NPTN:

NeoPhotonics Corporation designs and manufactures hybrid photonic integrated optoelectronic modules and subsystems for bandwidth-intensive, high-speed communications networks. NPTN has a PE ratio of 69. Currently there are 5 analysts that rate NeoPhotonics a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for NeoPhotonics has been 581,100 shares per day over the past 30 days. NeoPhotonics has a market cap of $421.8 million and is part of the technology sector and electronics industry. The stock has a beta of 0.96 and a short float of 5.2% with 2.72 days to cover. Shares are down 3.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates NeoPhotonics as a

hold

. 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 impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.

Highlights from the ratings report include:

  • NPTN's revenue growth has slightly outpaced the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 2.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • NPTN's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, NPTN has a quick ratio of 1.64, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for NEOPHOTONICS CORP is currently lower than what is desirable, coming in at 34.39%. Regardless of NPTN's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, NPTN's net profit margin of 1.64% is significantly lower than the industry average.
  • Net operating cash flow has decreased to $5.99 million or 32.53% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, NEOPHOTONICS CORP has marginally lower results.

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