NEW YORK ( TheStreet) -- United Microelectronics Corp (NYSE: UMC) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and compelling growth in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year. Highlights from the ratings report include:
- UMC has underperformed the S&P 500 Index, declining 21.33% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, UNITED MICROELECTRONICS CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The gross profit margin for UNITED MICROELECTRONICS CORP is rather high; currently it is at 51.00%. Regardless of UMC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 18.70% trails the industry average.
- UMC's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, UMC has a quick ratio of 1.74, which demonstrates the ability of the company to cover short-term liquidity needs.
- UMC's very impressive revenue growth greatly exceeded the industry average of 0.7%. Since the same quarter one year prior, revenues leaped by 52.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.