NEW YORK (TheStreet) -- SK Telecom (NYSE:SKM) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Wireless Telecommunication Services industry and the overall market, SK TELECOM CO LTD's return on equity exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has increased to $784.82 million or 39.88% when compared to the same quarter last year. In addition, SK TELECOM CO LTD has also vastly surpassed the industry average cash flow growth rate of -11.44%.
- SK TELECOM CO LTD's earnings per share declined by 33.3% 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, SK TELECOM CO LTD increased its bottom line by earning $1.85 versus $1.62 in the prior year. This year, the market expects an improvement in earnings ($1.90 versus $1.85).
- SKM, with its decline in revenue, underperformed when compared the industry average of 10.8%. Since the same quarter one year prior, revenues fell by 14.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
-- Written by a member of TheStreet RatingsStaff
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