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.

Trade-Ideas LLC identified

QLogic

(

QLGC

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

  • QLGC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.6 million.
  • QLGC has traded 725,523 shares today.
  • QLGC is up 3.2% today.
  • QLGC was down 22.1% yesterday.

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More details on QLGC:

TST Recommends

QLogic Corporation designs and supplies high performance server and storage networking infrastructure products that provide, enhance, and manage computer data communication. Its products facilitate the transfer of data and enable resource sharing between servers, networks, and storage. QLGC has a PE ratio of 2. Currently there are 5 analysts that rate QLogic a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for QLogic has been 1.1 million shares per day over the past 30 days. QLogic has a market cap of $1.0 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.62 and a short float of 3.1% with 1.58 days to cover. Shares are down 33.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates QLogic 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, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from the ratings report include:

  • QLGC 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 5.61, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 156.95% to $9.47 million when compared to the same quarter last year. In addition, QLOGIC CORP has also vastly surpassed the industry average cash flow growth rate of 51.22%.
  • QLOGIC CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, QLOGIC CORP turned its bottom line around by earning $0.57 versus -$0.20 in the prior year. This year, the market expects an improvement in earnings ($0.97 versus $0.57).
  • Compared to its closing price of one year ago, QLGC's share price has jumped by 25.33%, exceeding the performance of the broader market during that same time frame. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • 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 Computers & Peripherals industry. The net income has significantly decreased by 57.4% when compared to the same quarter one year ago, falling from $6.00 million to $2.56 million.

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