NEW YORK ( TheStreet) -- Integrated Silicon Solution (Nasdaq: ISSI) 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, attractive valuation levels, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market on the basis of return on equity, INTEGRATED SILICON SOLUTION has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Net operating cash flow has significantly increased by 159.66% to $7.58 million when compared to the same quarter last year. In addition, INTEGRATED SILICON SOLUTION has also vastly surpassed the industry average cash flow growth rate of -14.33%.
  • ISSI 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 2.72, which clearly demonstrates the ability to cover short-term cash needs.
  • The revenue growth came in higher than the industry average of 0.7%. Since the same quarter one year prior, revenues rose by 10.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.

Integrated Silicon Solution, Inc., a fabless semiconductor company, designs and markets integrated circuits for digital consumer electronics, networking and telecommunications, mobile communications, automotive electronics, and industrial markets. The company has a P/E ratio of 6.1, equal to the average electronics industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Integrated Silicon Solution has a market cap of $242 million and is part of the technology sector and electronics industry. Shares are up 15.1% year to date as of the close of trading on Wednesday.

You can view the full Integrated Silicon Solution Ratings Report or get investment ideas from our investment research center.
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