TSC Ratings' Updates: Netflix

We've upgraded Aurizon Mines (AZK Quote), which engages in the acquisition, exploration, development, and operation of gold properties in North America, from hold to buy. This upgrade is driven by growth in earnings per share, increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a decline in the stock price during the past year.

Aurizon Mines 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. During the past fiscal year, Aurizon Mines turned its bottom line around by earning $0.04 versus -$0.10 in the prior year.

The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Metals & Mining industry average. The net income increased by 87.7% when compared to the same quarter one year prior, rising from $3.79 million to $7.11 million.

The gross profit margin for Aurizon Mines is rather high; currently it is at 51.20%. Regardless of AZK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 20.00% trails the industry average.

Aurizon Mines' share price is down 21.06%, reflecting, in part, the market's overall decline, investors ignoring the increase in its earnings per share. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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. When compared to other companies in the Metals & Mining industry and the overall market, Aurizon Mines' return on equity is below that of both the industry average and the S&P 500.