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Great Northern Iron Ore Stock Upgraded (GNI)

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) -- Great Northern Iron Ore (NYSE: GNI) 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, notable return on equity, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

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Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 15.1%. Since the same quarter one year prior, revenues rose by 11.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • GNI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.13, which clearly demonstrates the ability to cover short-term cash 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 Metals & Mining industry and the overall market, GREAT NORTHERN IRON ORE PPTY's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • GREAT NORTHERN IRON ORE PPTY has improved earnings per share by 11.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, GREAT NORTHERN IRON ORE PPTY increased its bottom line by earning $15.37 versus $11.65 in the prior year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Metals & Mining industry average. The net income increased by 11.1% when compared to the same quarter one year prior, going from $5.65 million to $6.28 million.

Great Northern Iron Ore Properties, a conventional nonvoting trust, owns and leases mineral and non-mineral lands on the Mesabi Iron Range in northeastern Minnesota. The company has a P/E ratio of 4.8, equal to the average metals & mining industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Great Northern Iron Ore has a market cap of $120 million and is part of the basic materials sector and metals & mining industry. Shares are down 21.7% year to date as of the close of trading on Tuesday.

You can view the full Great Northern Iron Ore Ratings Report or get investment ideas from our investment research center.

-- 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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