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NEW YORK (TheStreet) -- Fairchild Semiconductor International (FCS) has been upgraded by TheStreet Ratings from Hold to Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate FAIRCHILD SEMICONDUCTOR INTL (FCS) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- FCS's revenue growth trails the industry average of 18.6%. Since the same quarter one year prior, revenues slightly increased by 4.5%. 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.
- FCS's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, FCS has a quick ratio of 2.19, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 63.14% to $54.00 million when compared to the same quarter last year. In addition, FAIRCHILD SEMICONDUCTOR INTL has also vastly surpassed the industry average cash flow growth rate of 11.90%.
- 43.35% is the gross profit margin for FAIRCHILD SEMICONDUCTOR INTL which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.26% is in-line with the industry average.
- Compared to its closing price of one year ago, FCS's share price has jumped by 33.33%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: FCS Ratings Report
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