NEW YORK (TheStreet) -- Panhandle Oil and Gas (NYSE:PHX) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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- The revenue growth came in higher than the industry average of 1.1%. Since the same quarter one year prior, revenues rose by 16.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- PHX's debt-to-equity ratio is very low at 0.10 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.06, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for PANHANDLE OIL & GAS INC is currently very high, coming in at 79.70%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.90% significantly outperformed against the industry average.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry average. The net income increased by 16.9% when compared to the same quarter one year prior, going from $2.65 million to $3.10 million.
- PANHANDLE OIL & GAS INC has improved earnings per share by 15.6% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, PANHANDLE OIL & GAS INC reported lower earnings of $1.01 versus $1.35 in the prior year.
-- 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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