Strong And Under The Radar: Cohu (COHU)

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

  • COHU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.5 million.
  • COHU is making at least a new 3-day high.
  • COHU has a PE ratio of 54.
  • COHU is mentioned 1.06 times per day on StockTwits.
  • COHU has not yet been mentioned on StockTwits today.
  • COHU is currently in the upper 20% of its 1-year range.
  • COHU is in the upper 35% of its 20-day range.
  • COHU is in the upper 45% of its 5-day range.
  • COHU 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 COHU:

Cohu, Inc. engages in the development, manufacture, sale, and servicing of test handling, burn-in, thermal sub-systems, and micro-electro-mechanical systems (MEMS) test solutions for the semiconductor industry; and mobile microwave communications equipment worldwide. The stock currently has a dividend yield of 1.9%. COHU has a PE ratio of 54. Currently there are 2 analysts that rate Cohu a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Cohu has been 102,100 shares per day over the past 30 days. Cohu has a market cap of $333.7 million and is part of the technology sector and electronics industry. The stock has a beta of 0.63 and a short float of 1.3% with 1.94 days to cover. Shares are up 9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cohu 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, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • COHU's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 4.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • COHU has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, COHU has a quick ratio of 2.05, which demonstrates the ability of the company to cover short-term liquidity needs.
  • COHU INC has improved earnings per share by 15.4% 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, COHU INC turned its bottom line around by earning $0.23 versus -$1.38 in the prior year. This year, the market expects an improvement in earnings ($0.92 versus $0.23).
  • 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 18.2% when compared to the same quarter one year prior, going from -$3.35 million to -$2.74 million.
  • Net operating cash flow has significantly increased by 147.13% to $4.22 million when compared to the same quarter last year. In addition, COHU INC has also vastly surpassed the industry average cash flow growth rate of 14.73%.

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