Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.NEW YORK (TheStreet) -- Altera (Nasdaq:ALTR) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
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- ALTR's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 6.15, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for ALTERA CORP is currently very high, coming in at 72.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.49% is above that of the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 11.0%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, ALTERA CORP's return on equity exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $126.71 million or 42.49% when compared to the same quarter last year. Despite a decrease in cash flow of 42.49%, ALTERA CORP is still significantly exceeding the industry average of -93.00%.
--Written by a member of TheStreet Ratings Staff.It's Official: Action Alerts PLUS beats the S&P 500 with Dividends Reinvested! Cramer and Link were up 16.72% in 2012. Were you? See what they are trading for 14-days FREE
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