STMicroelectronics (STM): Heavy Pre-Market Activity

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 STMicroelectronics ( STM) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified STMicroelectronics as such a stock due to the following factors:

  • STM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.0 million.
  • STM traded 224,937 shares today in the pre-market hours as of 9:13 AM, representing 21.1% of its average daily volume.

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More details on STM:

STMicroelectronics N.V. designs, develops, manufactures, and markets various semiconductor integrated circuits and discrete devices worldwide. The stock currently has a dividend yield of 4.2%. STM has a PE ratio of 58. Currently there is 1 analyst that rates STMicroelectronics a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for STMicroelectronics has been 1.5 million shares per day over the past 30 days. STMicroelectronics has a market cap of $7.1 billion and is part of the technology sector and electronics industry. Shares are up 7.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates STMicroelectronics as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. 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 company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Semiconductors & Semiconductor Equipment industry average. The net income increased by 8.3% when compared to the same quarter one year prior, going from -$24.00 million to -$22.00 million.
  • The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, STM has a quick ratio of 1.79, which demonstrates the ability of the company to cover short-term liquidity needs.
  • STMICROELECTRONICS NV reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, STMICROELECTRONICS NV turned its bottom line around by earning $0.14 versus -$0.56 in the prior year. This year, the market expects an improvement in earnings ($0.26 versus $0.14).
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, STMICROELECTRONICS NV's return on equity significantly trails that of both the industry average and the S&P 500.
  • STM has underperformed the S&P 500 Index, declining 12.70% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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