OmniVision Technologies (OVTI) In A Perilous Reversal

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 OmniVision Technologies ( OVTI) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified OmniVision Technologies as such a stock due to the following factors:

  • OVTI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.6 million.
  • OVTI has traded 73,598 shares today.
  • OVTI is down 3.7% today.
  • OVTI was up 6.4% yesterday.

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More details on OVTI:

OmniVision Technologies, Inc. designs, develops, manufactures, and markets semiconductor image-sensor devices worldwide. OVTI has a PE ratio of 14.0. Currently there is 1 analyst that rates OmniVision Technologies a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for OmniVision Technologies has been 620,800 shares per day over the past 30 days. OmniVision has a market cap of $1.7 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.34 and a short float of 2.4% with 1.54 days to cover. Shares are up 46.4% 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 OmniVision Technologies as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 85.71% and other important driving factors, this stock has surged by 83.14% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, OVTI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • OMNIVISION TECHNOLOGIES INC reported significant earnings per share improvement 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, OMNIVISION TECHNOLOGIES INC increased its bottom line by earning $1.69 versus $0.80 in the prior year. This year, the market expects an improvement in earnings ($1.95 versus $1.69).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 96.5% when compared to the same quarter one year prior, rising from $23.06 million to $45.33 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 18.6%. Since the same quarter one year prior, revenues slightly increased by 8.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • OVTI's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.77, which clearly demonstrates the ability to cover short-term cash needs.

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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