Today's Strong And Under The Radar Stock Is AU Optronics (AUO)

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

  • AUO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.9 million.
  • AUO is making at least a new 3-day high.
  • AUO has a PE ratio of 34.6.
  • AUO is mentioned 0.39 times per day on StockTwits.
  • AUO has not yet been mentioned on StockTwits today.
  • AUO is currently in the upper 20% of its 1-year range.
  • AUO is in the upper 35% of its 20-day range.
  • AUO is in the upper 45% of its 5-day range.
  • AUO 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 AUO:

AU Optronics Corp. is engaged in the design, development, production, assembly, and marketing of thin film transistor liquid crystal displays and other flat panel displays. The company operates in two segments, Display and Solar. The stock currently has a dividend yield of 0.1%. AUO has a PE ratio of 34.6. Currently there is 1 analyst that rates AU Optronics a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for AU Optronics has been 387,200 shares per day over the past 30 days. AU Optronics has a market cap of $4.7 billion and is part of the technology sector and electronics industry. Shares are up 55.1% 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 AU Optronics as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, AUO's share price has jumped by 43.34%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • AU OPTRONICS CORP's earnings per share declined by 6.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AU OPTRONICS CORP turned its bottom line around by earning $0.13 versus -$2.12 in the prior year. This year, the market expects an improvement in earnings ($0.53 versus $0.13).
  • AUO, with its decline in revenue, slightly underperformed the industry average of 1.8%. Since the same quarter one year prior, revenues slightly dropped by 6.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The debt-to-equity ratio of 1.01 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, AUO maintains a poor quick ratio of 0.81, which illustrates the inability to avoid short-term cash problems.
  • The gross profit margin for AU OPTRONICS CORP is rather low; currently it is at 24.55%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.88% trails that of 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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