Microchip Stock, A ‘Steady Eddie’ For Profits, Gets Upgrade

Microchip Technology (MCHP) is a standout in the computer chip group. It rank No. 2 out of 32 stocks in the group. On Thursday, Microchip stock saw its Relative Strength (RS) Rating climb from 68 to 72.

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The 72 RS Rating puts Microchip stock in the top 28% for price performance this past year. It’s a good-but-yet-not-great rating that reflects weakness in the chip sector more than for Microchip. Chandler, Ariz.-based memory-chip maker Microchip is a “Steady Eddie” type company whose other ratings are outstanding.

Microchip Stock Among Top 12% Overall

Microchip boasts a 93 Earnings Per Share Rating out of 99, reflecting double-digit profit growth over the past four quarters. It carries an 88 Composite Rating, a gauge of overall strength that combines five other fundamental and technical ratings. Its A- Accumulation/Distribution Rating, on an A+ to E scale, shows that it’s highly sought after by big money funds like ETFs and mutual funds.

Microchip Technology is building a cup with handle with an 85.13 entry. See if the stock can break out in volume at least 40% above average. On Nov. 1 Microchip stock dropped to 68.75 as the recent correction was ending. The chipmaker closed Thursday at 83.44, up about 0.6% for the day.

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Microchip Technology has recorded double-digit growth for both sales and profits over the past four quarters. It showed 11% earnings growth in the latest quarterly report, to $1.62 per share, while sales grew 9% to $2.254 billion.

Highly Ranked In Chip Group

Microchip stock earns the No. 2 rank among its peers in the Electronics-Semiconductor Manufacturing industry group. Netherlands-based NXP Semiconductors (NXPI) is No. 1 in the group. The group itself is just starting to perk up after a slump. It ranks a weak No. 150 on IBD’s list of 197 industry groups.

When researching the best stocks to buy and watch, a stock’s relative price strength vs. other stocks is a good tell.

IBD’s Relative Strength Rating identifies technical performance by using a 1 (worst) to 99 (best) score that indicates how a stock’s price performance over the trailing 52 weeks compares to other publicly traded companies

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