Diodes (NASDAQ:DIOD) Trading 10.4% Higher on Strong Earnings

Key Points

• Diodes Incorporated saw its stock price surge 10.4% following stronger-than-expected earnings, with earnings per share at $0.32, beating estimates of $0.24.
• The company also announced a $100 million share buyback plan as a sign of confidence in its undervalued shares.
• Analysts maintain a consensus rating of "Buy" for Diodes, with an average price target of $55.00, indicating potential growth.

Diodes Incorporated (NASDAQ:DIOD - Get Free Report)'s share price was up 10.4% during trading on Friday after the company announced better than expected quarterly earnings. The stock traded as high as $52.05 and last traded at $52.09. Approximately 270,822 shares were traded during trading, a decline of 47% from the average daily volume of 510,314 shares. The stock had previously closed at $47.17.

The semiconductor company reported $0.32 earnings per share for the quarter, beating analysts' consensus estimates of $0.24 by $0.08. Diodes had a return on equity of 2.98% and a net margin of 4.59%. The firm had revenue of $366.20 million for the quarter, compared to the consensus estimate of $352.08 million. During the same period in the previous year, the business earned $0.33 earnings per share. The company's revenue for the quarter was up 14.5% compared to the same quarter last year.

Diodes announced that its board has authorized a share buyback plan on Thursday, May 8th that allows the company to repurchase $100.00 million in outstanding shares. This repurchase authorization allows the semiconductor company to repurchase up to 5.4% of its stock through open market purchases. Stock repurchase plans are usually an indication that the company's board of directors believes its shares are undervalued.

Wall Street Analyst Weigh In

A number of analysts have commented on DIOD shares. Wall Street Zen upgraded Diodes from a "hold" rating to a "buy" rating in a research report on Sunday, August 3rd. Benchmark reiterated a "buy" rating and set a $62.00 target price (up from $55.00) on shares of Diodes in a research report on Friday, June 13th. One research analyst has rated the stock with a hold rating, three have issued a buy rating and one has given a strong buy rating to the company. According to data from MarketBeat.com, the stock presently has a consensus rating of "Buy" and an average target price of $55.00.

Institutional Trading of Diodes

A number of institutional investors have recently bought and sold shares of DIOD. Russell Investments Group Ltd. boosted its position in Diodes by 43.3% during the fourth quarter. Russell Investments Group Ltd. now owns 66,163 shares of the semiconductor company's stock worth $4,080,000 after purchasing an additional 20,005 shares in the last quarter. Bank of Montreal Can raised its holdings in shares of Diodes by 8.5% in the fourth quarter. Bank of Montreal Can now owns 6,100 shares of the semiconductor company's stock worth $376,000 after acquiring an additional 476 shares during the last quarter. Raymond James Financial Inc. acquired a new position in shares of Diodes in the fourth quarter worth $7,063,000. Sterling Capital Management LLC raised its holdings in shares of Diodes by 789.7% in the fourth quarter. Sterling Capital Management LLC now owns 1,290 shares of the semiconductor company's stock worth $80,000 after acquiring an additional 1,145 shares during the last quarter. Finally, Summit Investment Advisors Inc. raised its holdings in shares of Diodes by 5.8% in the fourth quarter. Summit Investment Advisors Inc. now owns 4,772 shares of the semiconductor company's stock worth $294,000 after acquiring an additional 262 shares during the last quarter. 99.23% of the stock is currently owned by hedge funds and other institutional investors.

Diodes Stock Performance

The company has a market capitalization of $2.45 billion, a price-to-earnings ratio of 38.48 and a beta of 1.47. The stock has a fifty day moving average price of $52.24 and a two-hundred day moving average price of $48.18. The company has a quick ratio of 2.04, a current ratio of 3.33 and a debt-to-equity ratio of 0.01.

Diodes Company Profile

Diodes Incorporated, together with its subsidiaries, manufactures and supplies application-specific standard products in the broad discrete, logic, analog, and mixed-signal semiconductor markets worldwide. The company offers discrete semiconductor products, such as MOSFETs, SiC MOSFETs; data line protection, power line protection, thyristers, USB Type-C protection, and transient voltage suppressors; Schottky, small signal switching, Zener, and SiC diodes; bridges, super barrier, Schottky, Schottky bridge, and fast/ultra-fast rectifiers; and bipolar, avalanche, gate driver, and pre-bias transistors.