NEW YORK (TheStreet) -- Shares of Integrated Silicon Solution (ISSI) were gaining 7.5% to $20.14 Thursday after the chipmaker received a letter from Cypress Semiconductor (CY) offering to buy the company.
In its letter to Integrated Silicon, Cypress offered to buy the company for $19.75 a share, representing a 16% premium over the chipmaker's closing price on Tuesday, according to the Wall Street Journal.
Cypress said its offer is superior to the $19.25 a share bid for the company by a group led by Summitview Capital in March. "We would have preferred to participate in your sale process, but were not contacted," Cypress said in its letter.
About 2.2 million shares of Integrated Silicon were traded by 12:09 p.m. Thursday, well above the company's average trading volume of about 406,000 shares a day.
TheStreet Ratings team rates INTEGRATED SILICON SOLUTION as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate INTEGRATED SILICON SOLUTION (ISSI) 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 largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ISSI's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ISSI has a quick ratio of 2.49, which demonstrates the ability of the company to cover short-term liquidity needs.
- INTEGRATED SILICON SOLUTION has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, INTEGRATED SILICON SOLUTION increased its bottom line by earning $0.74 versus $0.59 in the prior year. This year, the market expects an improvement in earnings ($0.91 versus $0.74).
- ISSI, with its decline in revenue, slightly underperformed the industry average of 0.0%. Since the same quarter one year prior, revenues slightly dropped by 0.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 87.3% when compared to the same quarter one year ago, falling from $8.81 million to $1.12 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, INTEGRATED SILICON SOLUTION's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: ISSI Ratings Report