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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 revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, expanding profit margins and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 3.3%. Since the same quarter one year prior, revenues rose by 20.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- IRF 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. Along with this, the company maintains a quick ratio of 3.47, which clearly demonstrates the ability to cover short-term cash needs.
- 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 190.1% when compared to the same quarter one year prior, rising from -$21.25 million to $19.14 million.
- 45.49% is the gross profit margin for INTL RECTIFIER CORP which we consider to be strong. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, IRF's net profit margin of 7.10% significantly trails the industry average.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
International Rectifier Corporation designs, manufactures, and markets power management semiconductors worldwide. The company operates through six segments: Power Management Devices, Energy Saving Products, Automotive Products, Enterprise Power, HiRel, and Intellectual Property. The company has a P/E ratio of 46.2, above the S&P 500 P/E ratio of 17.7. International Rectifier has a market cap of $1.81 billion and is part of the technology sector and electronics industry. Shares are down 2.2% year to date as of the close of trading on Tuesday.
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