Cytec Industries Stock Upgraded (CYT)

NEW YORK (TheStreet) -- Cytec Industries (NYSE:CYT) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

• CYTEC INDUSTRIES INC 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. We feel that this trend should continue. During the past fiscal year, CYTEC INDUSTRIES INC turned its bottom line around by earning $2.84 versus -$0.06 in the prior year. This year, the market expects an improvement in earnings ($3.27 versus $2.84).
• Despite its growing revenue, the company underperformed as compared with the industry average of 14.2%. Since the same quarter one year prior, revenues rose by 11.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
• The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, CYT has a quick ratio of 1.60, which demonstrates the ability of the company to cover short-term liquidity needs.
• The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Chemicals industry average. The net income increased by 27.1% when compared to the same quarter one year prior, rising from $37.70 million to $47.90 million.

Cytec Industries Inc., a specialty chemicals and materials company, engages in developing, manufacturing, and selling chemical products worldwide. The company has a P/E ratio of 13.8, above the average chemicals industry P/E ratio of 10.6 and below the S&P 500 P/E ratio of 17.7. Cytec has a market cap of $2.3 billion and is part of the basic materials sector and chemicals industry. Shares are down 14% year to date as of the close of trading on Wednesday.

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