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 Himax Technologies ( HIMX) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Himax Technologies as such a stock due to the following factors:

  • HIMX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.1 million.
  • HIMX has traded 174,374 shares today.
  • HIMX is up 3.5% today.
  • HIMX was down 7.3% yesterday.

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More details on HIMX:

Himax Technologies, Inc., a fabless semiconductor company, provides display imaging processing technologies to consumer electronics worldwide. The company operates through Driver IC and Non-Driver Products segments. The stock currently has a dividend yield of 7.8%. HIMX has a PE ratio of 2. Currently there are 4 analysts that rate Himax Technologies a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Himax Technologies has been 3.0 million shares per day over the past 30 days. Himax has a market cap of $1.2 billion and is part of the technology sector and electronics industry. Shares are down 18.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Himax Technologies as a buy. 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 increase in stock price during the past year. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • HIMX's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.37, which illustrates the ability to avoid short-term cash problems.
  • HIMX, with its decline in revenue, slightly underperformed the industry average of 10.6%. Since the same quarter one year prior, revenues fell by 13.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • In its most recent trading session, HIMX has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • HIMAX TECHNOLOGIES INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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 25.6% in earnings ($0.29 versus $0.39).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 63.4% when compared to the same quarter one year ago, falling from $24.11 million to $8.83 million.

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