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Tower International Inc Stock Upgraded (TOWR)

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) -- Tower International (NYSE: TOWR) has been upgraded by TheStreet Ratings from sell to hold. Among the primary strengths of the company is its compelling growth in net income over time. At the same time, however, we also find weaknesses including generally higher debt management risk, disappointing return on equity and poor profit margins.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Auto Components industry. The net income increased by 105.9% when compared to the same quarter one year prior, rising from $6.66 million to $13.72 million.
  • TOWR, with its decline in revenue, underperformed when compared the industry average of 0.9%. Since the same quarter one year prior, revenues fell by 17.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • TOWER INTERNATIONAL INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, TOWER INTERNATIONAL INC swung to a loss, reporting -$0.59 versus $0.38 in the prior year. This year, the market expects an improvement in earnings ($1.29 versus -$0.59).
  • The gross profit margin for TOWER INTERNATIONAL INC is currently extremely low, coming in at 11.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.70% trails that of the industry average.
  • Net operating cash flow has decreased to $64.92 million or 34.74% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
.

Tower International, Inc. operates as an integrated global manufacturer of engineered structural metal components and assemblies to automotive original equipment manufacturers. The company has a P/E ratio of 10.3, below the S&P 500 P/E ratio of 17.7. Tower International has a market cap of $226 million and is part of the industrial goods sector and industrial industry. Shares are up 51.2% year to date as of the close of trading on Thursday.

You can view the full Tower International 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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