Valassis Communications Inc Stock Upgraded (VCI)

NEW YORK (TheStreet) -- Valassis Communications (NYSE:VCI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

• The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 38.2% when compared to the same quarter one year prior, rising from $24.79 million to $34.27 million.
• VALASSIS COMMUNICATIONS INC reported significant earnings per share improvement in the most recent quarter compared to 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, VALASSIS COMMUNICATIONS INC reported lower earnings of $2.35 versus $7.46 in the prior year. This year, the market expects an improvement in earnings ($3.06 versus $2.35).
• VCI, with its decline in revenue, underperformed when compared the industry average of 19.1%. Since the same quarter one year prior, revenues slightly dropped by 5.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
• Even though the current debt-to-equity ratio is 1.34, it is still below the industry average, suggesting that this level of debt is acceptable within the Media industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.13 is sturdy.

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Valassis Communications, Inc., together with its subsidiaries, operates as a media and marketing services company primarily in the United States and Europe. The company has a P/E ratio of 11, above the average media industry P/E ratio of 10 and below the S&P 500 P/E ratio of 17.7. Valassis has a market cap of $933.1 million and is part of the services sector and media industry. Shares are up 36.8% year to date as of the close of trading on Friday.

You can view the full Valassis Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet RatingsStaff

 

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