Trade-Ideas: Silicon Motion Technology (SIMO) Is Today's New Lifetime High Stock

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 Silicon Motion Technology ( SIMO) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Silicon Motion Technology as such a stock due to the following factors:

  • SIMO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.5 million.
  • SIMO has traded 38,185 shares today.
  • SIMO is trading at a new lifetime high.

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More details on SIMO:

Silicon Motion Technology Corporation, a fabless semiconductor company, designs, develops, and markets semiconductor solutions worldwide. The stock currently has a dividend yield of 1.6%. SIMO has a PE ratio of 45. Currently there are 9 analysts that rate Silicon Motion Technology a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Silicon Motion Technology has been 673,000 shares per day over the past 30 days. Silicon Motion Technology has a market cap of $1.2 billion and is part of the technology sector and electronics industry. Shares are up 54% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Silicon Motion Technology as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and solid stock price performance. 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:
  • SIMO's very impressive revenue growth greatly exceeded the industry average of 0.7%. Since the same quarter one year prior, revenues leaped by 52.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SIMO 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. Along with this, the company maintains a quick ratio of 3.77, which clearly demonstrates the ability to cover short-term cash needs.
  • 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, SILICON MOTION TECH -ADR's return on equity exceeds that of both the industry average and the S&P 500.
  • Powered by its strong earnings growth of 300.00% and other important driving factors, this stock has surged by 98.03% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SIMO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

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