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Fairchild Semiconductor International Inc Stock Upgraded (FCS)

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) -- Fairchild Semiconductor International (NYSE:FCS) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:

  • FCS's debt-to-equity ratio is very low at 0.18 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 2.91, which clearly demonstrates the ability to cover short-term cash needs.
  • Despite the weak revenue results, FCS has outperformed against the industry average of 17.0%. Since the same quarter one year prior, revenues slightly dropped by 2.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • FAIRCHILD SEMICONDUCTOR INTL has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, FAIRCHILD SEMICONDUCTOR INTL reported lower earnings of $0.18 versus $1.12 in the prior year. This year, the market expects an improvement in earnings ($0.62 versus $0.18).
  • 36.40% is the gross profit margin for FAIRCHILD SEMICONDUCTOR INTL which we consider to be strong. Regardless of FCS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FCS's net profit margin of -0.14% significantly underperformed when compared to the industry average.
  • Net operating cash flow has significantly decreased to -$4.00 million or 123.80% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
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Fairchild Semiconductor International, Inc. designs, develops, manufactures, and sells power analog, power discrete, and non-power semiconductor solutions worldwide. The company has a P/E ratio of 70.9, above the S&P 500 P/E ratio of 17.7. Fairchild Semiconductor International has a market cap of $1.86 billion and is part of the technology sector and electronics industry. Shares are down 15.6% year to date as of the close of trading on Friday.

You can view the full Fairchild Semiconductor International Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

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.

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