The Case for and Against Microchip Technology Incorporated (MCHP)

Microchip Technology Incorporated (MCHP) is an interesting player in the Technology space, with a focus on Semiconductor – Broad Line. The stock has been active on the tape, currently trading at $100.24, up from yesterday’s close by 1.28%. Given the stock’s recent action, it seemed like a good time to take a closer look at the company’s recent data.

Fundamental Analysis

Microchip Technology Incorporated (MCHP) currently trades with a market capitalization of $23.47 Billion. That value represents a market adjusting for revenues that have been growing by 19.16 % on a quarterly year/year basis as of the company’s last quarterly report.

You can get a sense of how sustainable that is by a levered free cash flow of $1.21 Billion over the past twelve months. Generally speaking, earnings are expected to grow in coming quarters. Analysts are forecasting earnings of $1.35 on a per share basis this quarter. Perhaps, that suggests something about why 0.13% of the outstanding share supply is held by institutional investors.

Technical Analysis

We’ve taken a serious look at this stock from a fundamental perspective, but the tale of the tape may offer more hints about what lies under the surface. Looking at the stock’s movement on the chart, Microchip Technology Incorporated recorded a 52-week high of $99.17. It is now trading -1.07% off that level. The stock is trading $90.92 its 50-day moving average by -9.32%. The stock carved out a 52-week low down at $71.40.

In recent action, Microchip Technology Incorporated (MCHP) has made a move of +23.69% over the past month, which has come on Strong relative transaction volume. Over the trailing year, the stock is underperforming the S&P 500 by 17.8, and it’s gotten there by action that has been more volatile on a day-to-day basis than most other stocks on the exchange. In terms of the mechanics underlying that movement, traders will want to note that the stock is trading on a float of 12.80% with $229.49 Million sitting short, betting on future declines. That suggests something of the likelihood of a short squeeze in shares of MCHP.

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