NEW YORK (TheStreet) -- Omega Protein Corporation (NYSE:OME) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins.
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- Although OME's debt-to-equity ratio of 0.15 is very low, it is currently higher than that of the industry average. To add to this, OME has a quick ratio of 2.41, which demonstrates the ability of the company to cover short-term liquidity needs.
- 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 Food Products industry and the overall market, OMEGA PROTEIN CORP's return on equity exceeds that of both the industry average and the S&P 500.
- OME, with its decline in revenue, slightly underperformed the industry average of 24.3%. Since the same quarter one year prior, revenues fell by 29.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- OMEGA PROTEIN CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, OMEGA PROTEIN CORP increased its bottom line by earning $1.71 versus $0.97 in the prior year. For the next year, the market is expecting a contraction of 64.6% in earnings ($0.61 versus $1.71).
-- Written by a member of TheStreet Ratings Staff
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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