Today's Dead Cat Bounce Stock Is OmniVision Technologies (OVTI)

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 "dead cat bounce" (down big yesterday but up 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 $16.4 million.
  • OVTI has traded 179,841 shares today.
  • OVTI is up 3.2% today.
  • OVTI was down 8.1% 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 10.7. Currently there are 4 analysts that rate OmniVision Technologies a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for OmniVision Technologies has been 1.2 million shares per day over the past 30 days. OmniVision has a market cap of $868.5 million and is part of the technology sector and electronics industry. The stock has a beta of 2.13 and a short float of 10.2% with 5.05 days to cover. Shares are down 17.1% year-to-date as of the close of trading on Tuesday.

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 hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • 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 154.3% when compared to the same quarter one year prior, rising from $10.35 million to $26.30 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.3%. Since the same quarter one year prior, revenues slightly increased by 1.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • OMNIVISION TECHNOLOGIES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, OMNIVISION TECHNOLOGIES INC reported lower earnings of $0.80 versus $1.08 in the prior year. This year, the market expects an improvement in earnings ($1.71 versus $0.80).
  • In its most recent trading session, OVTI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The gross profit margin for OMNIVISION TECHNOLOGIES INC is rather low; currently it is at 20.32%. Regardless of OVTI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, OVTI's net profit margin of 6.62% is significantly lower than the industry average.

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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