Stock Trade – Himax Technologies, Inc. (HIMX) 
Saturday, April 19, 2014

STOCK TRADE: Buy HIMX at market price (approx. $9.12), good for the day. Place a protective stop-loss at $7.00 and a pre-determined sell at $14.50.

by Ian Harvey

April 19, 2014

Introduction

Members of Stock Options Made Easy bought the stock Himax Technologies, Inc. (ADR) (NASDAQ: HIMX) a year ago for $5.86 and sold it for $10.00. We now have an opportunity to gain more profit from this company’s growth. It managed to climb to just above $16.00 before pulling back to the $9.00 mark which allows for a nice entry price.

On Tuesday, the company preannounced its first-quarter 2014 numbers, saying it expects revenue of $194.6 million. This is 10.8% higher than the same time last year and far exceeds the company's guidance of flat to slightly lower sales for the period. Analysts had expected revenue of $193.58 million.

Analysts have reported that HIMX has reasonable debt and solid returns on equity despite a weaker-than-average operating cash flow.

Despite the positive fundamental report, shares plunged this week. The sell-off was primarily due to the company losing a large, unnamed client for its display drivers. This resulted in Northland Capital Markets lowering its price target from $20 to $15. That target is still 60% above the current price.

RSI(2) is below 30, indicating the stock is oversold, there is price support in the $8.50 range, and the fundamental picture for the company looks solid. Therefore, it is believed that Himax is now a buy at this price.

Company Details

Himax Technologies operates as an IC design house with LCD manufacturing capability. The Company focuses on display IC products for display device and offers LCD technical consulting to customers to provide them with value-added technical support and integrated solutions.

Himax is a holding company that operates through its wholly owned subsidiary, Himax Technologies Limited (Himax Taiwan).

It is best-known as a supplier for Google (NASDAQ: GOOG) Glass.

Key Statistics for HIMX

Current P/E Ratio (ttm) 24.8501
Estimated P/E(-) 15.6971
Relative P/E vs. SPX 1.4450
Earnings Per Share (USD) (ttm) 0.3670
Est. EPS (USD) -
Est. PEG Ratio 0.6976
Market Cap (M USD) 1,554.96
Shares Outstanding (M) 170.50
30 Day Average Volume 8,590,073
Price/Book (mrq) 6.9146
Price/Sale (ttm) 2.0141
Dividend Indicated Gross Yield 2.74%
Cash Dividend (USD) 0.2400
Dividend Ex-Date 07/17/2013
5 Year Dividend Growth -6.17%
Next Earnings Announcement 05/12/2014

Technical Outlook

Shares of Himax Technologies, Inc. opened at 9.12 on Thursday. Himax Technologies, Inc. has a 52-week low of $4.76 and a 52-week high of $16.15. The stock has a 50-day moving average of $12.75 and a 200-day moving average of $12.0.

The company has a market cap of $1.555 billion and a P/E ratio of 25.98.

Himax Technologies, Inc. (ADR) also was the recipient of a significant decline in short interest during the month of January. As of March 31st, there was short interest totaling 6,549,273 shares, a decline of 16.6% from the March 14th total of 7,849,980 shares. Currently, 0.0% of the company’s stocks are sold short. Based on an average daily trading volume, of 8,414,129 shares, the days-to-cover ratio is currently 0.8 days.

Earnings

Himax Technologies, Inc. last issued its quarterly earnings data on Wednesday, February 19th. The company reported $0.10 earnings per share for the quarter, meeting the analysts’ consensus estimate of $0.10. The company had revenue of $195.20 million for the quarter, compared to the consensus estimate of $193.31 million.

During the same quarter last year, the company posted $0.09 earnings per share. Himax Technologies, Inc. (ADR)’s revenue was up 2.4% compared to the same quarter last year. On average, analysts predict that Himax Technologies, Inc. will post $0.61 earnings per share for the current fiscal year.

Conclusion

RSI(2) is below 30, indicating the stock is oversold, there is price support in the $8.50 range, and the fundamental picture for the company looks solid. Therefore, it is believed that Himax is now a buy at this price.

Therefore, based on the facts above the following stock trade is recommended…..


**STOCK TRADE: Buy HIMX at market price (approx. $9.12), good for the day. Place a protective stop-loss at $7.00 and a pre-determined sell at $14.50.



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