Cypress Semiconductor Corporation (CY) Demands Investors Rethink Their Bets

It has been reported that multiple insider activity took place at Cypress Semiconductor Corporation (CY). EVP, Memory Products GEHA SAM sold 5,000 shares for $120,603 in transaction occurred on 2019/04/08. After making this transaction, EVP, Memory Products owns a direct stake of shares, worth $1,913,970, as per the last closing price.

EVP, Finance & CFO, Thad Trent had divested 17,000 shares for $323,117 through a trade on 2019/03/15. Following this activity, the insider holds 3 shares worth $5,127,867 as of recent close.

Ivy Science & Technology Fund revealed as top hedge fund owner in Cypress Semiconductor Corporation (CY) with a stake of over 18.86M CY shares as of September 29, with a market value of approx. $273.22M as of today. The second largest holder, iShares Core S&P Midcap ETF, with 10.33M shares which equates to $159.33M worth of the stock. At third is Vanguard Small-Cap Index Fund, which stood pat with 9.23M shares, a 2.34% position in Cypress Semiconductor Corporation, worth $133.78M. The insider holding in stood at 0.4% while institutions hold 83.8%.

Cypress Semiconductor Corporation (NASDAQ:CY) rose 0.06% in recent trade and currently has a stock-market value of $5.72B. The shares finished at $15.87, after trading as low as $15.815 earlier in the session. It hit an intraday high Thursday at $16.03. Trading activity significantly weakened as the volume at ready counter decreased to 1,579,345 shares versus 3,378,820 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 4,127,884 shares. The stock is now 35.06% above against its bear-market low of $11.75 on October 24, 2018. It has retreated -17.14% since it’s 52-week high of $18.59 reached in July. Now the market price is down -6.98% on the year and up 24.76% YTD.

CY stock’s 50 day simple moving average (SMA 50) price is $15.28 and its 200-day simple moving average (SMA 200) price is $14.81. The company’s stock currently has a total float of 360.72M shares. Its weekly volatility is hovering around 1.49% and felt 2% volatility in price over a month. On the upside, the share price will test short term resistance at around $16. On a downside, the stock is likely to find some support, which begins at $15.78. The failure to get near-term support could push it to $15.69.

It had seen a change in price target from analysts at Craig Hallum, who reiterated the stock at Buy on February 01 but moved PT from $20 to $18. Analysts at Craig Hallum, maintained the company shares at Buy on October 26 but switched target price from $25 to $20. Brokerage firm Cowen, looks cautious as they stick to prior recommendation of Outperform, in a call on October 23. However, they did change the target price from $21 to $18. MKM Partners, released new analyst coverage on October 04, calling the stock is Buy.

When looking at valuations, Cypress Semiconductor Corporation (CY) has a cheap P/E of 16.58x as compared to industry average of 269.1x. Moreover, it trades for 13.05 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 2.71x price/book and 2.3x price/sales. Compared to others, Cypress Semiconductor Corporation is in a different league with regards to profitability, having net margins of 14.3%. To put some perspective around this, the industry’s average net margin is 14.9%. CY’s ROE is 18.5%, which is also considerably better than the industry’s ROE of -7.45%. It’s also very liquid in the near term, with a current ratio of 1.6. The stock has a debt/capital of 0.42.

Shares of CY have gained 14.3% since the company’s most recent earnings report. Over the past 12 fiscal quarters, Cypress Semiconductor Corporation (NASDAQ:CY) has topped consensus earnings estimates in 10 quarters (83%), missed earnings in 2 quarters (16%), whereas at 0 occasion EPS met analyst expectations. CY last reported earnings that exceeded expectations. The company raked in $0.35 per share, -94.78% change on the same period last year. That was better than consensus for $0.33. Revenue for the recent quarter stood at $604.47 million, up 1% on last year and above the $598.9 million predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $507.73 million to $553.4 million, which should be compared with $655.68 million generated last year. EPS is seen in a range of $0.22 to $0.27, against the $0.34 reported a year ago.