Editor's Note: 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 NEW YORK (TheStreet) -- Heritage-Crystal Clean (Nasdaq:HCCI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, increase in net income and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- HCCI's very impressive revenue growth greatly exceeded the industry average of 29.9%. Since the same quarter one year prior, revenues leaped by 94.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- HCCI's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.85, which clearly demonstrates the ability to cover short-term cash needs.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Services & Supplies industry. The net income increased by 69.4% when compared to the same quarter one year prior, rising from $0.72 million to $1.22 million.
- Net operating cash flow has significantly increased by 116.98% to $0.39 million when compared to the same quarter last year. In addition, HERITAGE-CRYSTAL CLEAN INC has also vastly surpassed the industry average cash flow growth rate of 64.00%.
- Powered by its strong earnings growth of 40.00% and other important driving factors, this stock has surged by 26.21% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
-- Written by a member of TheStreet Ratings Staff
Editor's Note: 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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