Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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Highlights from the ratings report include:
- 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 229.7% when compared to the same quarter one year prior, rising from $18.27 million to $60.23 million.
- CSRE has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
- The gross profit margin for CSR PLC is rather high; currently it is at 60.37%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 31.09% is above that of the industry average.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- CSR PLC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CSR PLC swung to a loss, reporting -$1.20 versus $1.03 in the prior year. This year, the market expects an improvement in earnings ($1.98 versus -$1.20).
CSR plc, a fabless semiconductor company, designs and develops semiconductor integrated circuits primarily in Asia, the Americas, and Europe. CSR has a market cap of $1.5 billion and is part of the technology sector and electronics industry. Shares are down 15.8% year to date as of the close of trading on Friday.
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