NEW YORK (TheStreet) -- Atmel Corp. (ATML) stock closed up by 0.81% to $8.68 on Monday, after reports from Reuters suggested that fellow semiconductor manufacturer Microchip Technology (MCHP) is preparing to submit a binding acquisition offer to the company as soon as next week.

The proposal would challenge Dialog Semiconductor's (DLGNF) proposed $4.6 billion acquisition of Atmel, which was announced in September.

Last month, Atmel acknowledged it received a $3.8 billion offer from an undisclosed entity that may have been Microchip, Reuters reports.

Atmel's board is comparing last month's offer with Dialog's proposal and will choose the superior proposal. The board, however, continues to recommend Dialog's offer.

San Jose, CA-based Atmel is a manufacturer of microcontrollers and other components for the industrial, automotive, consumer, computing and communications industries.

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate ATMEL CORP as a Hold with a ratings score of C. 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, disappointing return on equity and weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • ATML's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ATML has a quick ratio of 1.66, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for ATMEL CORP is rather high; currently it is at 50.55%. 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 -0.21% is in-line with the industry average.
  • ATMEL CORP 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, ATMEL CORP turned its bottom line around by earning $0.08 versus -$0.05 in the prior year. This year, the market expects an improvement in earnings ($0.34 versus $0.08).
  • Net operating cash flow has decreased to $30.59 million or 30.28% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • 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, ATMEL CORP'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: ATML