Trade-Ideas: OmniVision Technologies (OVTI) Is Today's

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 OmniVision Technologies ( OVTI) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified OmniVision Technologies as such a stock due to the following factors:

  • OVTI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.2 million.
  • OVTI has traded 3.7 million shares today.
  • OVTI is down 3.2% today.
  • OVTI was up 9.4% yesterday.

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More details on OVTI:

OmniVision Technologies, Inc. engages in designing, developing, and marketing semiconductor image-sensor devices worldwide. OVTI has a PE ratio of 20.6. Currently there are 7 analysts that rate OmniVision Technologies a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for OmniVision Technologies has been 1.3 million shares per day over the past 30 days. OmniVision has a market cap of $916.3 million and is part of the technology sector and electronics industry. Shares are up 17.2% year to date as of the close of trading on Friday.

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

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates OmniVision Technologies as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • OVTI's very impressive revenue growth greatly exceeded the industry average of 13.6%. Since the same quarter one year prior, revenues leaped by 53.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • OVTI's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, OVTI has a quick ratio of 1.51, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 232.8% when compared to the same quarter one year prior, rising from $2.68 million to $8.92 million.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

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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