For its most recent reported quarter, this semiconductor company beat analysts’ estimates, producing EPS of $0.91 vs. the estimates of $0.53.
OmniVision Technologies (OVTI)
from Validea Hot List Newsletter
OmniVision Technologies, Inc. (OVTI) designs integrated and semiconductor image-sensor devices. The Company’s main products, CameraChip image sensors, capture an image electronically and are used in a number of consumer and commercial mass-market applications. These sensors are manufactured using the complementary metal oxide semiconductor (CMOS), fabrication process and are single-chip solutions that integrate several distinct functions, including image capture, image processing, color processing, signal conversion and output of a fully processed image or video stream. The company has also integrated its CameraChip image with CameraCubeChip imaging devices, sensors with wafer-level optics—a small footprint, total camera solution.
OVTI gets strong interest from my Peter Lynch-based model.
Strategy: Growth Investor
Based on: Martin Zweig
Guru Score: 77%
P/E RATIO: [PASS]
OVTI’s P/E is 12.77, based on trailing 12 month earnings, while the current market PE is 16.00.
SALES GROWTH RATE: [PASS]
Sales growth for the prior quarter must be greater than the latter. For OVTI this criterion has been met.
CURRENT QUARTER EARNINGS: [PASS]
Current EPS must be positive. OVTI’s EPS ($0.78) pass this test.
QUARTERLY EARNINGS ONE YEAR AGO: [PASS]
OVTI’s EPS for this quarter last year ($0.42) pass this test.
POSITIVE EARNINGS GROWTH RATE FOR CURRENT QUARTER: [PASS]
OVTI’s growth rate of 85.71% passes this test.
EARNINGS GROWTH RATE FOR THE PAST SEVERAL QUARTERS: [PASS]
Half of the long-term EPS growth rate for OVTI is 21.03%. This should be less than the growth rates for the 3 previous quarters, which are 147.37%, 35.00%, and 68.75%. OVTI passes this test, which means that it has good, reasonably steady earnings.
EPS GROWTH FOR CURRENT QUARTER MUST BE GREATER THAN PRIOR 3 QUARTERS: [PASS]
If the growth rate of the prior three quarter’s earnings, 70.67%, (versus the same three quarters a year earlier) is less than the growth rate of the current quarter earnings, 85.71%, (versus the same quarter one year ago) then the stock passes.
EPS GROWTH FOR CURRENT QUARTER MUST BE GREATER THAN THE HISTORICAL GROWTH RATE: [PASS]
The EPS growth rate for the current quarter, 85.71% must be greater than or equal to the historical growth which is 42.07%. OVTI would therefore pass this test.
LONG-TERM EPS GROWTH: [PASS]
OVTI’s long-term growth rate of 42.07%, based on the average of the 3 and 4 year historical EPS growth rates, passes this test.
TOTAL DEBT/EQUITY RATIO: [PASS]
OVTI’s Debt/Equity (3.42%) is not considered high relative to its industry (38.68%) and passes this test.
John Reese, Validea Hot List Newsletter, www.validea.com, 877-439-0506, September 26, 2014