Trade-Ideas LLC identified

Fairchild Semiconductor International

(

FCS

) 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 Fairchild Semiconductor International as such a stock due to the following factors:

  • FCS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $45.8 million.
  • FCS has traded 808,304 shares today.
  • FCS traded in a range 217.9% of the normal price range with a price range of $1.77.
  • FCS traded above its daily resistance level (quality: 123 days, meaning that the stock is crossing a resistance level set by the last 123 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 FCS:

TheStreet Recommends

Fairchild Semiconductor International, Inc. designs, develops, manufactures, and markets power analog, power discrete, and non-power semiconductor solutions worldwide. Currently there are 3 analysts that rate Fairchild Semiconductor International a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Fairchild Semiconductor International has been 1.5 million shares per day over the past 30 days. Fairchild Semiconductor International has a market cap of $2.0 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.32 and a short float of 5.3% with 2.61 days to cover. Shares are up 0.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Fairchild Semiconductor International 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, solid stock price performance 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:

  • FCS's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, FCS has a quick ratio of 1.72, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 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, despite the company's weak earnings results. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 13.4%. Since the same quarter one year prior, revenues fell by 10.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, FAIRCHILD SEMICONDUCTOR INTL's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $5.80 million or 89.25% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, FAIRCHILD SEMICONDUCTOR INTL has marginally lower results.

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