Mesa Laboratories (NASDAQ: MLAB) is rated at BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. 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, solid stock price performance, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry average. The net income increased by 9.5% when compared to the same quarter one year prior, going from $2.05 million to $2.25 million.
- MESA LABORATORIES INC has improved earnings per share by 8.5% 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. We feel that this trend should continue. During the past fiscal year, MESA LABORATORIES INC increased its bottom line by earning $2.27 versus $1.84 in the prior year. This year, the market expects an improvement in earnings ($2.66 versus $2.27).
- 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. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- MLAB's debt-to-equity ratio is very low at 0.17 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 3.01, which clearly demonstrates the ability to cover short-term cash needs.
Mesa Laboratories, Inc. designs, manufactures, and markets instruments and disposable products utilized primarily in healthcare, pharmaceutical, food and beverage, medical device, and petrochemical industries.You can view the full Mesa Laboratories Ratings Report or get investment ideas from our investment research center. This is just a list of 5 of 50 stocks! Download a list of all 50 of TheStreet Ratings Tech Picks for 2013 NOW! 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.