Today's Strong And Under The Radar Stock: Microsemi (MSCC)

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

  • MSCC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.2 million.
  • MSCC is making at least a new 3-day high.
  • MSCC has a PE ratio of 116.3.
  • MSCC is mentioned 0.87 times per day on StockTwits.
  • MSCC has not yet been mentioned on StockTwits today.
  • MSCC is currently in the upper 20% of its 1-year range.
  • MSCC is in the upper 35% of its 20-day range.
  • MSCC is in the upper 45% of its 5-day range.
  • MSCC 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 MSCC:

Microsemi Corporation designs, manufactures, and markets analog and mixed-signal semiconductor solutions in the United States, Europe, and Asia. MSCC has a PE ratio of 116.3. Currently there are 4 analysts that rate Microsemi a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Microsemi has been 553,700 shares per day over the past 30 days. Microsemi has a market cap of $2.7 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.53 and a short float of 3.1% with 6.36 days to cover. Shares are up 12.7% year-to-date as of the close of trading on Thursday.

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 Microsemi as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • MSCC's revenue growth has slightly outpaced the industry average of 18.6%. Since the same quarter one year prior, revenues rose by 21.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 132.8% when compared to the same quarter one year prior, rising from $14.09 million to $32.80 million.
  • Net operating cash flow has increased to $59.62 million or 13.79% when compared to the same quarter last year. In addition, MICROSEMI CORP has also modestly surpassed the industry average cash flow growth rate of 11.94%.
  • MSCC's debt-to-equity ratio of 0.63 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that MSCC's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.19 is high and demonstrates strong liquidity.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

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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