Trade-Ideas: Microchip Technology (MCHP) Is Today's Post-Market Leader 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 Microchip Technology ( MCHP) as a post-market leader 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 $55.5 million.
  • MCHP is up 2% today from today's close.

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More details on MCHP:

Microchip Technology Incorporated develops, manufactures, and sells semiconductor products for various embedded control applications. The stock currently has a dividend yield of 3%. MCHP has a PE ratio of 25.9. Currently there are 4 analysts that rate Microchip Technology a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Microchip Technology has been 1.4 million shares per day over the past 30 days. Microchip Technology has a market cap of $9.6 billion and is part of the technology sector and electronics industry. Shares are up 6.5% year-to-date as of the close of trading on Wednesday.

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 Microchip Technology as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, notable return on equity, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • MCHP's revenue growth has slightly outpaced the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 14.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MICROCHIP TECHNOLOGY INC has improved earnings per share by 8.1% 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, MICROCHIP TECHNOLOGY INC increased its bottom line by earning $1.81 versus $0.61 in the prior year. This year, the market expects an improvement in earnings ($2.82 versus $1.81).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, MICROCHIP TECHNOLOGY INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for MICROCHIP TECHNOLOGY INC is rather high; currently it is at 64.04%. 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 17.00% trails the industry average.
  • Net operating cash flow has remained constant at $165.79 million with no significant change when compared to the same quarter last year. In addition, MICROCHIP TECHNOLOGY INC has modestly surpassed the industry average cash flow growth rate of -8.94%.

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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