Perilous Reversal Watch: Intersil Corporation (ISIL)

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

  • ISIL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.8 million.
  • ISIL has traded 173,673 shares today.
  • ISIL is down 3% today.
  • ISIL was up 5.1% yesterday.

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More details on ISIL:

Intersil Corporation designs and develops power management and precision analog integrated circuits (ICs) for applications in the industrial and infrastructure, consumer, and personal computing markets. The stock currently has a dividend yield of 3.7%. ISIL has a PE ratio of 160.4. Currently there are 4 analysts that rate Intersil Corporation a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Intersil Corporation has been 1.2 million shares per day over the past 30 days. Intersil has a market cap of $1.7 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.34 and a short float of 3.1% with 2.92 days to cover. Shares are up 17.6% 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 Intersil Corporation as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • INTERSIL 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 year. We feel that this trend should continue. During the past fiscal year, INTERSIL CORP turned its bottom line around by earning $0.03 versus -$0.29 in the prior year. This year, the market expects an improvement in earnings ($0.73 versus $0.03).
  • 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 1261.8% when compared to the same quarter one year prior, rising from $1.00 million to $13.65 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.4%. Since the same quarter one year prior, revenues slightly increased by 2.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ISIL 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. To add to this, ISIL has a quick ratio of 2.23, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for INTERSIL CORP is rather high; currently it is at 61.31%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, ISIL's net profit margin of 9.23% significantly trails 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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