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Microchip Stock Shows Rising Relative Strength Amid Repeated Double-Digit Quarterly Profit Gains

The Relative Strength (RS) Rating for Microchip Technology (MCHP) headed into a higher percentile Monday, as it got a lift from 70 to 74. The chipmaker’s other key ratings are higher.

The 74 RS Rating means that Microchip stock has outperformed 74% of all stocks in IBD’s database. Additionally, Microchip sports a 90 Composite Rating, of a best-possible 99. It also has an 81 EPS Rating, putting it in the top 19% of companies for profit growth. And its B- Accumulation/Distribution Rating indicates moderately strong buying of its shares by institutional investors.

Can Microchip Break Out From Consolidation?

Stocks that go on to make the biggest gains typically have an 80 or higher RS Rating in the early stages of their moves. See if Microchip Technology, a maker of digital signal controllers, flash memory and other chips, can continue to rebound and hit that benchmark.

In terms of fundamentals, Chandler, Ariz.-based Microchip Technology has posted rising EPS growth in each of the last three reports. Revenue growth has also moved higher over the same time frame. Last quarter, Microchip reported a 27% year-over-year increase in EPS to $1.98 on a 20% rise in revenue to $1.57 billion.

Microchip stock earns the No. 9 rank among its peers in the Electronics-Semiconductor Manufacturing industry group. Chipmos Technologies (IMOS) and ON Semiconductor (ON) are also among the group’s highest-rated stocks.


See How IBD Helps You Make More Money In Stocks


Microchip stock is building a consolidation with a 166.77 entry. See if it can clear the breakout price in volume at least 40% above average.

When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.

This exclusive rating from Investor’s Business Daily measures share price movement with a 1 (worst) to 99 (best) score. The score shows how a stock’s price behavior over the last 52 weeks holds up against all the other stocks in our database.

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