NEW YORK (
) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.
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Highlights from the ratings report include:
- MEMS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 28.63%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, MEMSIC INC's return on equity significantly trails that of both the industry average and the S&P 500.
- MEMS, with its decline in revenue, underperformed when compared the industry average of 14.4%. Since the same quarter one year prior, revenues slightly dropped by 6.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- 43.70% is the gross profit margin for MEMSIC INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -3.20% is in-line with the industry average.
- MEMS's debt-to-equity ratio is very low at 0.20 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 6.17, which clearly demonstrates the ability to cover short-term cash needs.
MEMSIC, Inc. provides semiconductor sensor and system solutions based on integrated micro electro-mechanical systems (MEMS) technology and mixed signal circuit design. Its sensor products, principally include accelerometers and magnetic sensors. Memsic has a market cap of $53.2 million and is part of the
industry. Shares are down 21.9% year to date as of the close of trading on Monday.
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-- Written by a member of TheStreet Ratings Staff
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.