Watch Out: Barbarians At The Gate For NXP Semiconductors (NXPI)

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 NXP Semiconductors ( NXPI) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified NXP Semiconductors as such a stock due to the following factors:

  • NXPI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $253.4 million.
  • NXPI has traded 5.8 million shares today.
  • NXPI traded in a range 231.4% of the normal price range with a price range of $3.40.
  • NXPI traded above its daily resistance level (quality: 530 days, meaning that the stock is crossing a resistance level set by the last 530 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on NXPI:

NXP Semiconductors N.V. provides high performance mixed signal and standard product solutions for radio frequency (RF), analog, power management, interface, security, and digital processing products worldwide. NXPI has a PE ratio of 38.4. Currently there are 12 analysts that rate NXP Semiconductors a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for NXP Semiconductors has been 2.9 million shares per day over the past 30 days. NXP Semiconductors has a market cap of $16.9 billion and is part of the technology sector and electronics industry. The stock has a beta of 2.14 and a short float of 0.8% with 0.94 days to cover. Shares are up 55% year-to-date as of the close of trading on Monday.

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 NXP Semiconductors as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • NXPI's revenue growth has slightly outpaced the industry average of 10.3%. Since the same quarter one year prior, revenues rose by 13.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • NXP SEMICONDUCTORS NV has improved earnings per share by 48.8% 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, NXP SEMICONDUCTORS NV turned its bottom line around by earning $1.34 versus -$0.48 in the prior year. This year, the market expects an improvement in earnings ($4.66 versus $1.34).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Semiconductors & Semiconductor Equipment industry average. The net income increased by 43.2% when compared to the same quarter one year prior, rising from $111.00 million to $159.00 million.
  • 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, NXP SEMICONDUCTORS NV's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 51.25% to $242.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 7.77%.

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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