Universal Display (OLED) Highlighted As Today's Perilous Reversal Stock

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 Universal Display ( OLED) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Universal Display as such a stock due to the following factors:

  • OLED has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $31.1 million.
  • OLED has traded 573,120 shares today.
  • OLED is down 4.3% today.
  • OLED was up 15.2% yesterday.

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More details on OLED:

Universal Display Corporation is engaged in the research, development, and commercialization of organic light emitting diode (OLED) technologies and materials for use in flat panel displays and solid-state lighting applications. OLED has a PE ratio of 14.0. Currently there are 5 analysts that rate Universal Display a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Universal Display has been 542,400 shares per day over the past 30 days. Universal Display has a market cap of $1.2 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 0.29 and a short float of 25.9% with 6.97 days to cover. Shares are down 16.6% 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 Universal Display as a hold. 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 and notable return on equity. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • OLED's very impressive revenue growth greatly exceeded the industry average of 6.1%. Since the same quarter one year prior, revenues leaped by 75.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • OLED 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 12.41, which clearly demonstrates the ability to cover short-term cash needs.
  • UNIVERSAL DISPLAY CORP 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, UNIVERSAL DISPLAY CORP increased its bottom line by earning $1.59 versus $0.20 in the prior year. For the next year, the market is expecting a contraction of 34.0% in earnings ($1.05 versus $1.59).
  • OLED has underperformed the S&P 500 Index, declining 24.82% from its price level of one year ago. 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.

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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