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 $5.4 million.
  • MCRL is making at least a new 3-day high.
  • MCRL has a PE ratio of 49.3.
  • MCRL is mentioned 0.48 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 1.7%. MCRL has a PE ratio of 49.3. 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 461,400 shares per day over the past 30 days. Micrel has a market cap of $670.3 million and is part of the technology sector and electronics industry. The stock has a beta of 1.51 and a short float of 4.8% with 4.32 days to cover. Shares are up 23% 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 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, solid stock price performance, compelling growth in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 18.9%. Since the same quarter one year prior, revenues rose by 16.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the 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 2.20, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 30.28% over the past year, a rise that has exceeded that of the S&P 500 Index. 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.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Semiconductors & Semiconductor Equipment industry average. The net income increased by 16.8% when compared to the same quarter one year prior, going from $4.00 million to $4.68 million.
  • MICREL INC has improved earnings per share by 14.3% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, MICREL INC increased its bottom line by earning $0.31 versus $0.20 in the prior year. For the next year, the market is expecting a contraction of 29.0% in earnings ($0.22 versus $0.31).

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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