Today's Dead Cat Bounce Stock: Universal Display (OLED)

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 Universal Display ( OLED) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Universal Display as such a stock due to the following factors:

  • OLED has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.9 million.
  • OLED has traded 88,125 shares today.
  • OLED is up 3.1% today.
  • OLED was down 5.8% yesterday.

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More details on OLED:

Universal Display Corporation is engaged in the research, development, and commercialization of organic light emitting diode (OLED) technologies and materials for use in flat panel displays and solid-state lighting applications. OLED has a PE ratio of 14.8. Currently there are 4 analysts that rate Universal Display a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Universal Display has been 659,700 shares per day over the past 30 days. Universal Display has a market cap of $1.3 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 2.04 and a short float of 28.5% with 9.30 days to cover. Shares are down 25.1% 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 Universal Display as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.7%. Since the same quarter one year prior, revenues rose by 29.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • OLED 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. Along with this, the company maintains a quick ratio of 12.10, which clearly demonstrates the ability to cover short-term cash needs.
  • 49.93% is the gross profit margin for UNIVERSAL DISPLAY CORP which we consider to be strong. Regardless of OLED's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OLED's net profit margin of 31.84% significantly outperformed against the industry.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Electronic Equipment, Instruments & Components industry average, but is greater than that of the S&P 500. The net income increased by 32.8% when compared to the same quarter one year prior, rising from $15.38 million to $20.42 million.
  • OLED has underperformed the S&P 500 Index, declining 8.87% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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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