BOSTON ( TheStreet) -- TheStreet's quantitative equity model considers the following five stocks the best-in-breed of the semiconductor industry. They are rated "buy."

5. ARM Holdings ( ARMH) designs microprocessors.

The numbers: Fourth-quarter net income nearly tripled to $28 million and earnings per share doubled to 6 cents. Revenue soared 94% to $141 million. ARM's operating margin declined from 25% to 23%. The company holds $230 million of cash and no debt.

The stock: ARM Holdings rocketed 143% over the past year, outpacing the Dow Jones U.S. Semiconductors Index. The stock has a PEG ratio, a measure of value relative to growth, of 0.5. A PEG ratio of less than 1 implies undervalued shares.

4. Skyworks Solutions ( SWKS) sells analog and mixed-signal semiconductors.

The numbers: Fiscal first-quarter profit increased 19% to $28 million, or 16 cents a share, as revenue grew 17% to $245 million. The company's operating margin widened from 10% to 17%. Skyworks Solutions holds $402 million of cash and $119 million of debt.

The stock: Skyworks Solutions appreciated 132% over the past twelve months, beating the Dow Jones U.S. Semiconductors Index. The stock trades at a PEG ratio of 0.3, indicating cheap shares. The PEG ratio represents a 42% discount to the industry average.

3. Atheros Communications ( ATHR) sells semiconductors for communication systems like Bluetooth and GPS.

The numbers: Atheros swung to a fourth-quarter profit of $16 million, or 24 cents a share, from a loss of $4.8 million, or 8 cents, a year earlier. Revenue surged 89% to $186 million. The operating margin rose from negative territory to 14%. Atheros holds $402 million of cash and no debt.

The stock: Atheros Communications tripled during the past twelve months, trouncing the Dow Jones U.S. Semiconductors Index. The stock sells at a PEG ratio of 0.3, marking an affordable investment. The PEG ratio reflects a 54% discount to the industry average.

2. NVE Corp. ( NVEC) designs spintronic devices.

The numbers: Fiscal third-quarter profit increased 12% to $2.8 million, or 57 cents a share, as revenue grew 13% to $6.6 million. NVE Corp.'s operating margin remained steady at 56%. Its balance sheet contains $2.8 million of cash and no debt.

The stock: NVE Corp. advanced 60% during the past year, lagging behind the Dow Jones U.S. Semiconductors Index. The stock trades at a PEG ratio of 1.1, indicating a premium to peers. The shares are cheap based on earnings and cash flow.

1. Cree ( CREE) manufactures light-emitting diode and silicon carbide products.

The numbers: Fiscal second-quarter profit tripled to $34 million, or 32 cents a share, as revenue grew 35% to $199 million. Cree's operating margin extended from 8.2% to 23%. The company holds $939 million of cash, equating to a quick ratio of 9.8, and no debt.

The stock: Cree soared 233% over the past twelve months, outperforming the Dow Jones U.S. Semiconductors Index. The stock trades at a PEG ratio of 0.3, indicating cheap shares. The PEG ratio represents a 56% discount to the industry average.

-- Reported by Jake Lynch in Boston.