New Lifetime High Today: Microchip Technology (MCHP)

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 new lifetime high 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 $134.7 million.
  • MCHP has traded 1.1 million shares today.
  • MCHP is trading at a new lifetime high.

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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 3.3%. MCHP has a PE ratio of 37.1. Currently there are 3 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 2.1 million shares per day over the past 30 days. Microchip Technology has a market cap of $8.6 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.08 and a short float of 11.7% with 7.01 days to cover. Shares are up 33.2% year-to-date as of the close of trading on Monday.

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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, compelling growth in net income, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. 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:
  • The revenue growth greatly exceeded the industry average of 10.0%. Since the same quarter one year prior, revenues rose by 28.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 571.1% when compared to the same quarter one year prior, rising from -$21.18 million to $99.81 million.
  • Net operating cash flow has significantly increased by 144.74% to $154.92 million 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 -12.12%.
  • The gross profit margin for MICROCHIP TECHNOLOGY INC is rather high; currently it is at 63.57%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 20.25% trails the industry average.
  • Powered by its strong earnings growth of 518.18% and other important driving factors, this stock has surged by 32.39% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

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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