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Cameron International Corporation Stock Buy Recommendation Reiterated (CAM)

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) -- Cameron International Corporation (NYSE:CAM) has been reiterated by TheStreet Ratings as a buy with a ratings score of B+ . The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, good cash flow from operations, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • CAM's revenue growth has slightly outpaced the industry average of 13.1%. Since the same quarter one year prior, revenues rose by 18.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Energy Equipment & Services industry average. The net income increased by 17.9% when compared to the same quarter one year prior, going from $148.10 million to $174.60 million.
  • Net operating cash flow has significantly increased by 61.08% to $163.50 million when compared to the same quarter last year. In addition, CAMERON INTERNATIONAL CORP has also vastly surpassed the industry average cash flow growth rate of -50.98%.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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.
  • CAMERON INTERNATIONAL CORP has improved earnings per share by 18.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CAMERON INTERNATIONAL CORP reported lower earnings of $2.09 versus $2.27 in the prior year. This year, the market expects an improvement in earnings ($3.25 versus $2.09).

Cameron International Corporation provides flow equipment products, systems, and services worldwide. The company has a P/E ratio of 24.2, equal to the average energy industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Cameron International has a market cap of $13.79 billion and is part of the basic materials sector and energy industry. Shares are up 13.8% year to date as of the close of trading on Wednesday.

You can view the full Cameron International Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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