Editor's Note: 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 NEW YORK ( TheStreet) -- Chipmos Technologies Bermuda (Nasdaq: IMOS) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.
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- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 4950.0% when compared to the same quarter one year prior, rising from -$0.20 million to $9.70 million.
- IMOS's debt-to-equity ratio of 0.85 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that IMOS's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.06 is high and demonstrates strong liquidity.
- IMOS, with its decline in revenue, underperformed when compared the industry average of 13.5%. Since the same quarter one year prior, revenues slightly dropped by 0.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for CHIPMOS TECHNOLOGIES LTD is currently extremely low, coming in at 12.50%. Regardless of IMOS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, IMOS's net profit margin of 6.00% is significantly lower than the same period one year prior.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, CHIPMOS TECHNOLOGIES LTD's return on equity significantly trails that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff