Himax (HIMX) Surges on Heavy Volume

NEW YORK (TheStreet) -- Himax Technologies (HIMX) soared more than 10% over Wednesday's session, surging on heavy volume.

By mid-afternoon, shares had gained 10.2% to $15.23. 

A day earlier, Bank of America reiterated its "buy" rating on the LCD chipmaker and revised its price target to $17.50, the highest estimate among investment firms. Bank of America said the progress Himax has made in liquid crystal on silicon (LCOS) microdisplays was "highly encouraging."

The Taiwanese business skyrocketed 520% over 2013 after it landed a key contract as the microdisplay supplier to Google (GOOG) Glass.

HIMX Chart HIMX data by YCharts

TheStreet Ratings team rates HIMAX TECHNOLOGIES INC as a Buy with a ratings score of B. The team has this to say about their recommendation:

"We rate HIMAX TECHNOLOGIES INC (HIMX) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • HIMX's revenue growth has slightly outpaced the industry average of 0.4%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Although HIMX's debt-to-equity ratio of 0.27 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.42, which illustrates the ability to avoid short-term cash problems.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 319.00% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HIMX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • HIMAX TECHNOLOGIES INC has improved earnings per share by 16.7% 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, HIMAX TECHNOLOGIES INC increased its bottom line by earning $0.30 versus $0.06 in the prior year. This year, the market expects an improvement in earnings ($0.35 versus $0.30).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Semiconductors & Semiconductor Equipment industry average. The net income increased by 17.9% when compared to the same quarter one year prior, going from $10.41 million to $12.27 million.

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