Today's Perilous Reversal Stock: Himax Technologies (HIMX)

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.

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

  • HIMX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.3 million.
  • HIMX has traded 582,371 shares today.
  • HIMX is down 3.3% today.
  • HIMX was up 5% yesterday.

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More details on HIMX:

Himax Technologies, Inc., a fabless semiconductor company, provides display imaging processing technologies to consumer electronics worldwide. The company operates through Driver IC and Non-Driver Products segments. The stock currently has a dividend yield of 4.2%. HIMX has a PE ratio of 17. Currently there are 2 analysts that rate Himax Technologies a buy, 2 analysts rate it a sell, and 4 rate it a hold.

The average volume for Himax Technologies has been 2.4 million shares per day over the past 30 days. Himax has a market cap of $1.1 billion and is part of the technology sector and electronics industry. Shares are down 23.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Himax Technologies 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, reasonable valuation levels, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.0%. Since the same quarter one year prior, revenues rose by 16.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • HIMX's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, HIMX has a quick ratio of 1.51, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly increased by 1367.78% to $38.68 million when compared to the same quarter last year. In addition, HIMAX TECHNOLOGIES INC has also vastly surpassed the industry average cash flow growth rate of 13.72%.
  • HIMAX TECHNOLOGIES INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, HIMAX TECHNOLOGIES INC increased its bottom line by earning $0.39 versus $0.35 in the prior year. For the next year, the market is expecting a contraction of 12.8% in earnings ($0.34 versus $0.39).

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