Today's Pre-Market Mover With Heavy Volume: ON Semiconductor (ON)

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

  • ON has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $57.2 million.
  • ON traded 7.3 million shares today in the pre-market hours as of 8:58 AM, representing 170.1% of its average daily volume.

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More details on ON:

ON Semiconductor Corporation manufactures and sells semiconductor components for various electronic devices worldwide. It operates in four segments: Application Products Group, Image Sensor Group, Standard Products Group, and System Solutions Group. ON has a PE ratio of 31. Currently there are 9 analysts that rate ON Semiconductor a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for ON Semiconductor has been 5.4 million shares per day over the past 30 days. ON Semiconductor has a market cap of $5.7 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.69 and a short float of 2.7% with 2.60 days to cover. Shares are up 30.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates ON Semiconductor as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.8%. Since the same quarter one year prior, revenues rose by 23.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Compared to its closing price of one year ago, ON's share price has jumped by 49.48%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ON should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • ON SEMICONDUCTOR CORP 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, ON SEMICONDUCTOR CORP increased its bottom line by earning $0.42 versus $0.33 in the prior year. This year, the market expects an improvement in earnings ($0.95 versus $0.42).
  • The debt-to-equity ratio is somewhat low, currently at 0.72, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.90 is somewhat weak and could be cause for future problems.
  • Net operating cash flow has increased to $83.50 million or 11.48% when compared to the same quarter last year. Despite an increase in cash flow, ON SEMICONDUCTOR CORP's average is still marginally south of the industry average growth rate of 20.26%.

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