Tuesday brought an upgrade to buy from hold for Kyocera ( KYO). Based out of Kyoto, Japan, the firm manufactures fine ceramic, semiconductor and telecommunications equipment worldwide. This rating change is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. Despite its growing revenue, the company underperformed as compared with the industry average of 23.3%. Since the same quarter one year prior, revenue rose by 22.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving its EPS. Kyocera's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, Kyocera has a quick ratio of 2.31, which demonstrates the ability of the company to cover short-term liquidity needs. Net operating cash flow has increased to $382.76 million, or by 34.9% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -7.39%. Kyocera's EPS improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive EPS growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, Kyocera increased its bottom line by earning $5.66 a share, vs. $4.55 a share in the prior year. For the next year, the market is expecting a contraction of 21.2% in earnings ($4.46 a share, vs. $5.66). Kyocera had been rated a hold since Oct. 31, 2007.