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 Microchip Technology ( MCHP) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Microchip Technology as such a stock due to the following factors:
- MCHP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $77.3 million.
- MCHP is up 2.6% today from today's close.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in MCHP with the Ticky from Trade-Ideas. See the FREE profile for MCHP NOW at Trade-Ideas More details on MCHP: Microchip Technology Incorporated engages in developing, manufacturing, and selling semiconductor products for embedded control applications. The stock currently has a dividend yield of 3.5%. MCHP has a PE ratio of 68.2. Currently there are 4 analysts that rate Microchip Technology a buy, no analysts rate it a sell, and 4 rate it a hold. The average volume for Microchip Technology has been 1.6 million shares per day over the past 30 days. Microchip Technology has a market cap of $8.1 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.05 and a short float of 10.8% with 9.78 days to cover. Shares are up 25.6% 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 Microchip Technology as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, expanding profit margins 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:
- The revenue growth greatly exceeded the industry average of 9.0%. Since the same quarter one year prior, revenues rose by 31.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $164.43 million or 27.49% when compared to the same quarter last year. In addition, MICROCHIP TECHNOLOGY INC has also vastly surpassed the industry average cash flow growth rate of -92.78%.
- Despite currently having a low debt-to-equity ratio of 0.50, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.40 is very high and demonstrates very strong liquidity.
- The gross profit margin for MICROCHIP TECHNOLOGY INC is rather high; currently it is at 62.51%. Regardless of MCHP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 16.97% trails the industry average.
- MICROCHIP TECHNOLOGY INC's earnings per share declined by 5.1% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, MICROCHIP TECHNOLOGY INC reported lower earnings of $0.61 versus $1.66 in the prior year. This year, the market expects an improvement in earnings ($2.36 versus $0.61).
- You can view the full Microchip Technology 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.