NEW YORK (TheStreet) -- Cott (NYSE:COT) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
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- Net operating cash flow has significantly increased by 78.87% to $38.10 million when compared to the same quarter last year. In addition, COTT CORP QUE has also vastly surpassed the industry average cash flow growth rate of 2.47%.
- COT, with its decline in revenue, slightly underperformed the industry average of 1.3%. Since the same quarter one year prior, revenues slightly dropped by 2.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- The debt-to-equity ratio of 1.02 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, COT's quick ratio is somewhat strong at 1.19, demonstrating the ability to handle short-term liquidity needs.
- The gross profit margin for COTT CORP QUE is rather low; currently it is at 18.50%. Regardless of COT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, COT's net profit margin of 4.00% is significantly lower than the same period one year prior.
-- 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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