Rating Change #4
Texas Industries Inc (TXI) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
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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 Construction Materials industry. The net income increased by 762.7% when compared to the same quarter one year prior, rising from -$9.09 million to $60.21 million.
- Net operating cash flow has significantly increased by 674.97% to $8.05 million when compared to the same quarter last year. In addition, TEXAS INDUSTRIES INC has also vastly surpassed the industry average cash flow growth rate of 104.23%.
- Despite the weak revenue results, TXI has outperformed against the industry average of 15.0%. Since the same quarter one year prior, revenues slightly dropped by 0.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Construction Materials industry and the overall market, TEXAS INDUSTRIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- TXI has underperformed the S&P 500 Index, declining 6.03% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.