The Beijing-based investment management company offered to buy the U.S. chipmaker for $29 a share, valuing Omnivision at $1.67 billion. The offer price is a 17.9% premium to the stock’s closing price on Wednesday.
Omnivision said it is evaluating the proposal.
Must read: Warren Buffett's 25 Favorite StocksEXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE. TheStreet Ratings team rates OMNIVISION TECHNOLOGIES INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation: "We rate OMNIVISION TECHNOLOGIES INC (OVTI) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 52.94% and other important driving factors, this stock has surged by 37.87% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, OVTI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 68.9% when compared to the same quarter one year prior, rising from $8.92 million to $15.07 million.
- OVTI's debt-to-equity ratio is very low at 0.04 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 3.03, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 610.83% to $62.40 million when compared to the same quarter last year. In addition, OMNIVISION TECHNOLOGIES INC has also vastly surpassed the industry average cash flow growth rate of -11.39%.
- You can view the full analysis from the report here: OVTI Ratings Report