TSC Ratings' Updates: BancorpSouth

BXS had been rated a hold since July 1, 2008.

MPS Group(MPS Quote) was upgraded from a hold to buy. MPS Group provides staffing, consulting and business solutions to various industries in the U.S., the U.K., Canada, continental Europe, Australia and Asia. The company operates in two divisions: professional services and information technology (IT) services. 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, attractive valuation levels, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

MPS's revenue growth has slightly outpaced the industry average of 0.4%. Since the same quarter one year prior, revenue rose by 10.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

MPS's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, MPS has a quick ratio of 2.15, which demonstrates the ability of the company to cover short-term liquidity needs.

Net operating cash flow has increased to $34.32 million or 23.55% when compared with the same quarter last year. In addition, MPS has also modestly surpassed the industry average cash flow growth rate of 19.28%.

MPS's earnings per share improvement from the most-recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MPS increased its bottom line by earning 86 cents vs. 72 cents in the prior year. This year, the market expects an improvement in earnings (89 cents vs. 86 cents).