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NEW YORK (TheStreet) -- International Rectifier (IRF) has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate INTL RECTIFIER CORP (IRF) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- INTL RECTIFIER CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, INTL RECTIFIER CORP turned its bottom line around by earning $0.81 versus -$1.29 in the prior year. This year, the market expects an improvement in earnings ($1.61 versus $0.81).
- 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 313.0% when compared to the same quarter one year prior, rising from -$6.08 million to $12.95 million.
- 42.88% is the gross profit margin for INTL RECTIFIER CORP which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, IRF's net profit margin of 4.35% significantly trails the industry average.
- Powered by its strong earnings growth of 300.00% and other important driving factors, this stock has surged by 69.94% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, INTL RECTIFIER CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: IRF Ratings Report