Himax Technologies (HIMX) Stock Gains After Upgrade

NEW YORK (TheStreet) -- Shares of Himax Technologies (HIMX) were gaining 6% to $6.52 on heavy trading volume Wednesday following an upgrade from Rosenblatt Securities.

The analyst firm upgraded the semiconductor company to "buy" from "neutral." Rosenblatt Securities also raised its price target for the company to $9 from $7.40.

Rosenblatt analyst Jun Zhang said the "worst is over" for Himax and that it could become a "prime takeover target."

Himax is a fabless semiconductor company based in Taiwan City, Taiwan that produces liquid crystal on silicon chips which were used in Google Glass.

About 2.9 million shares of Himax were traded by 1:13 p.m. Wednesday, above the company's average trading volume of about 2.5 million shares a day.

TheStreet Ratings team rates HIMAX TECHNOLOGIES INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate HIMAX TECHNOLOGIES INC (HIMX) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • HIMX's debt-to-equity ratio is very low at 0.27 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 1.53, which demonstrates the ability of the company to cover short-term liquidity needs.
  • HIMX, with its decline in revenue, slightly underperformed the industry average of 0.0%. Since the same quarter one year prior, revenues slightly dropped by 8.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • HIMAX TECHNOLOGIES INC's earnings per share declined by 22.2% in the most recent quarter compared to the same quarter a year ago. 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).
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, HIMX has underperformed the S&P 500 Index, declining 7.32% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • You can view the full analysis from the report here: HIMX Ratings Report

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