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 Alliance Fiber Optic Products ( AFOP) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Alliance Fiber Optic Products as such a stock due to the following factors:
- AFOP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.2 million.
- AFOP has traded 1.0 million shares today.
- AFOP is up 3.4% today.
- AFOP was down 5.1% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in AFOP with the Ticky from Trade-Ideas. See the FREE profile for AFOP NOW at Trade-Ideas More details on AFOP: Alliance Fiber Optic Products, Inc. designs, manufactures, and markets various fiber optic components and integrated modules for communications equipment manufacturers and service providers in North America, Europe, and Asia. The stock currently has a dividend yield of 0.6%. AFOP has a PE ratio of 29.7. Currently there are no analysts that rate Alliance Fiber Optic Products a buy, no analysts rate it a sell, and 1 rates it a hold. The average volume for Alliance Fiber Optic Products has been 912,800 shares per day over the past 30 days. Alliance Fiber Optic has a market cap of $409.6 million and is part of the technology sector and electronics industry. The stock has a beta of 2.09 and a short float of 33.8% with 2.54 days to cover. Shares are up 276% 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 Alliance Fiber Optic Products 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, notable return on equity, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value. Highlights from the ratings report include:
- AFOP's very impressive revenue growth greatly exceeded the industry average of 29.8%. Since the same quarter one year prior, revenues leaped by 65.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- AFOP 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 3.18, which clearly demonstrates the ability to cover short-term cash needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, ALLIANCE FIBER OPTIC PRODUCT's return on equity exceeds that of both the industry average and the S&P 500.
- Powered by its strong earnings growth of 235.71% and other important driving factors, this stock has surged by 324.86% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- ALLIANCE FIBER OPTIC PRODUCT reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ALLIANCE FIBER OPTIC PRODUCT increased its bottom line by earning $0.54 versus $0.25 in the prior year. This year, the market expects an improvement in earnings ($0.97 versus $0.54).
- You can view the full Alliance Fiber Optic Products Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.