Ann Inc. Stock Upgraded (ANN)

NEW YORK (TheStreet) -- Ann (NYSE:ANN) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, attractive valuation levels, impressive record of earnings per share growth and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

• The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 11.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
• Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Specialty Retail industry and the overall market, ANN INC's return on equity exceeds that of both the industry average and the S&P 500.
• ANN INC has improved earnings per share by 48.8% 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, ANN INC turned its bottom line around by earning $1.24 versus -$0.33 in the prior year. This year, the market expects an improvement in earnings ($1.87 versus $1.24).
• The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Specialty Retail industry average. The net income increased by 33.4% when compared to the same quarter one year prior, rising from $24.20 million to $32.28 million.

ANN INC. operates as a specialty retailer of women's apparel, shoes, and accessories primarily in the United States. It offers a range of career and casual separates, dresses, tops, weekend wear, shoes, and accessories under the Ann Taylor and LOFT brands. The company has a P/E ratio of 16.7, above the average retail industry P/E ratio of 16.5 and below the S&P 500 P/E ratio of 17.7. Ann has a market cap of $1.32 billion and is part of the services sector and retail industry. Shares are down 14.1% year to date as of the close of trading on Monday.

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