Does Monolithic Power Systems Inc. (MPWR) offer a good opportunity for investors?

Monolithic Power Systems Inc. (NASDAQ: MPWR) stock fell -0.22% on Monday to $463.19 against a previous-day closing price of $464.23. With 0.53 million shares changed hands, the volume of the stock remained lighter than its average volume of 0.54 million shares. During the session, the Semiconductors company that operates in wider Technology sector, reached to the highest price of $472.49 whereas the lowest price it dropped to was $459.76. The 52-week range on MPWR shows that it touched its highest point at $595.98 and its lowest point at $301.69 during that stretch. It currently has a 1-year price target of $585.00. With its current market cap of 22.84 billion, MPWR has annualized dividend of $4.00 while the current yield stands at 0.86%. Beta for the stock currently stands at 1.15.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of MPWR was down-trending over the past week, with a drop of -4.72%, but this was down by -4.57% over a month. Three-month performance dropped to -10.51% while six-month performance fell -5.14%. The stock gained 10.58% in the past year, while it has gained 30.99% so far this year. A look at the trailing 12-month EPS for MPWR yields 9.32 with Next year EPS estimates of 13.52. For the next quarter, that number is 3.07. This implies an EPS growth rate of 79.10% for this year and 14.97% for next year. EPS is expected to grow by 25.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 27.50%.

Float and Shares Shorts:

At present, 47.49 million MPWR shares are outstanding with a float of 46.31 million shares on hand for trading. On Aug 14, 2023, short shares totaled 1.51 million, which was 3.16% higher than short shares on Jul 13, 2023. In addition to Mr. Michael R. Hsing as the firm’s Founder, Chairman, Pres & CEO, Mr. T. Bernie Blegen serves as its VP & CFO.

Institutional Ownership:

Through their ownership of 100.68% of MPWR’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 67.92% of MPWR, in contrast to 31.05% held by mutual funds. Shares owned by individuals account for 21.65%. As the largest shareholder in MPWR with 10.59% of the stake, The Vanguard Group, Inc. holds 5,061,363 shares worth 5,061,363. A second-largest stockholder of MPWR, BlackRock Fund Advisors, holds 3,085,803 shares, controlling over 6.46% of the firm’s shares. Fidelity Management & Research Co is the third largest shareholder in MPWR, holding 2,558,327 shares or 5.36% stake. With a 2.94% stake in MPWR, the Vanguard Total Stock Market ETF is the largest stakeholder. A total of 1,405,380 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 2.27% of MPWR stock, is the second-largest Mutual Fund holder. It holds 1,084,476 shares valued at 565.24 million. Vanguard Mid Cap Index Fund holds 2.19% of the stake in MPWR, owning 1,043,978 shares worth 544.13 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2023, MPWR reported revenue of $461.00M and operating income of $143.16M. The EBITDA in the recently reported quarter was $144.44M and diluted EPS was $2.37.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for MPWR since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With MPWR analysts setting a high price target of $625.00 and a low target of $560.00, the average target price over the next 12 months is $583.79. Based on these targets, MPWR could surge 34.93% to reach the target high and rise by 20.9% to reach the target low. Reaching the average price target will result in a growth of 26.04% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Dividends & Yield:

In terms of dividends, MPWR has a current ratio of $4.00, which is $4.00 over the trailing 12-months, while a dividend of $2.12 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and MPWR currently yields $0.76. In the past year, MPWR’s dividend yield has been $0.76, but when looking at the stock over the past five years, its yield has been $0.73.

Summary of Insider Activity:

Insiders traded MPWR stock several times over the past three months with 0 Buys and 20 Sells. In these transactions, 0 shares were bought while 104,086 shares were sold. The number of buy transactions has increased to 18 while that of sell transactions has risen to 117 over the past year. The total number of shares bought during that period was 309,389 while 416,097 shares were sold.

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