With semiconductors having high relative strength and decent fundamentals, we found MIPS within the industry to be a possible buy. MIPS has earnings acceleration with the last Qtr/Qtr earnings growth being 183.3%. At this time we have seen 2 quarters of earnings acceleration and negative 5 year earnings growth, showing us that MIPS may be early in its earnings cycle. High Return on also shows us that they are using their resources in a decent way. Current MIPS boasts an 84 for our proprietary fundamental grade.
The technical picture is even better with a 94 grade. The float of only 49.8 shows us why this stock has moved so fast and why it can continue. Stocks will low supply and high demand can realize explosive moves, especially when combined with explosive earnings. The current Demand/Supply imbalance according to our measures is extremely high and favorable for further appreciation. Also, a high percentage of the shares are short which could create a short squeeze if the shorts are wrong.
Our Combination grade for MIPS is 98 and our Composite grade is 92