Micrel (MCRL) Highlighted As Strong And Under The Radar Stock Of The Day

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 Micrel ( MCRL) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Micrel as such a stock due to the following factors:

  • MCRL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.3 million.
  • MCRL is making at least a new 3-day high.
  • MCRL has a PE ratio of 54.1.
  • MCRL is mentioned 1.10 times per day on StockTwits.
  • MCRL has not yet been mentioned on StockTwits today.
  • MCRL is currently in the upper 20% of its 1-year range.
  • MCRL is in the upper 35% of its 20-day range.
  • MCRL is in the upper 45% of its 5-day range.
  • MCRL is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on MCRL:

Micrel, Incorporated, together with its subsidiaries, designs, develops, manufactures, and markets analog, mixed-signal, and digital semiconductor devices. The stock currently has a dividend yield of 1.6%. MCRL has a PE ratio of 54.1. Currently there are 2 analysts that rate Micrel a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Micrel has been 454,600 shares per day over the past 30 days. Micrel has a market cap of $703.3 million and is part of the technology sector and electronics industry. The stock has a beta of 1.38 and a short float of 5.7% with 2.12 days to cover. Shares are up 27.9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Micrel as a buy. 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, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.3%. Since the same quarter one year prior, revenues slightly increased by 5.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • MCRL 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, MCRL has a quick ratio of 2.18, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly increased by 551.18% to $13.18 million when compared to the same quarter last year. In addition, MICREL INC has also vastly surpassed the industry average cash flow growth rate of 7.77%.
  • The gross profit margin for MICREL INC is rather high; currently it is at 57.73%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MCRL's net profit margin of 5.66% significantly trails the industry average.
  • Compared to its closing price of one year ago, MCRL's share price has jumped by 31.36%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

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