Short Ideas: 4 Companies Cutting Guidance With Rising Receivables

The following list includes four companies that have lowered earnings guidance below analysts’ estimates within the past month. Additionally, these companies have recently seen accounts receivable growth exceeding revenue growth, an accounting trend that raises a flag.

Does this mean the customers of the companies mentioned below cannot pay their bills? Or is this simply an indication of a structural business change?

There may be several explanations for these accounting trends. Please use this list as a starting point for your own analysis - check out the 10-Q and related management discussions to find out more.

Financial data sourced from MSN Money, short float and performance data sourced from Finviz, recent developments sourced from Reuters.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.

Your browser does not support iframes.

1. Anadigics, Inc. (ANAD): Semiconductor Industry. Market cap of $359.41M. Guided Q1 at a loss between -$0.07 to -0.08 vs. estimate of a gain of $0.04.

MRQ Revenue grew by 44.06% on a y/y basis, while accounts receivable grew by 76.41%. Accounts receivable, as a percentage of current assets, increased from 16.14% to 22.56% (comparing 3 mo. ending 12/30/2009 vs. 3 mo. ending 12/30/2010).

Short float at 5.25%, which implies a short ratio of 2.57 days. The stock has gained 27.17% over the last year.

Recent developments: Announced joining the Global Select Market of the NASDAQ Stock Market (Jan. 2011).

2. TriQuint Semiconductor, Inc. (TQNT): Semiconductor Industry. Market cap of $2.27B. Guided Q1 at $0.14-0.16 vs. estimate of $0.19.

MRQ Revenue grew by 31.06% on a y/y basis, while accounts receivable grew by 57.78%. Accounts receivable, as a percentage of current assets, increased from 24.56% to 25.11% (comparing 3 mo. ending 12/30/2009 vs. 3 mo. ending 12/30/2010).

Short float at 7.83%, which implies a short ratio of 2.78 days. The stock has gained 98.47% over the last year.

3. Parexel International Corp. (PRXL): Medical Laboratories & Research Industry. Market cap of $1.38B. Guided FY11 at $1.17-1.23 (down from $1.23-1.31) vs. estimate of $1.26.

MRQ Revenue grew by 7.71% on a y/y basis, while accounts receivable grew by 21.78%. Accounts receivable, as a percentage of current assets, increased from 73.58% to 78.47% (comparing 3 mo. ending 12/30/2009 vs. 3 mo. ending 12/30/2010).

Short float at 9.02%, which implies a short ratio of 5.62 days. The stock has gained 14.26% over the last year.

Recent developments: Announced opening logistics facilities in Singapore and Russia (Dec. 2010).

4. Intersil Corporation (ISIL): Semiconductor Industry. Market cap of $1.59B. Guided Q1 at $0.13-0.16 vs. estimate of $0.17.

MRQ Revenue grew by 9.17% on a y/y basis, while accounts receivable grew by 20.47%. Accounts receivable, as a percentage of current assets, increased from 13.32% to 14.54% (comparing 13 weeks ending 1/1/2010 vs. 13 weeks ending 12/31/2010).

Short float at 10.54%, which implies a short ratio of 4.64 days. The stock has lost -14.22% over the last year.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.