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Summit Hotel Properties Inc. Stock Upgraded (INN)

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) -- Summit Hotel Properties (NYSE: INN) 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, compelling growth in net income, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company shows low 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:

  • INN's very impressive revenue growth greatly exceeded the industry average of 15.9%. Since the same quarter one year prior, revenues leaped by 53.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 63.1% when compared to the same quarter one year prior, rising from -$2.23 million to -$0.82 million.
  • Net operating cash flow has significantly increased by 182.88% to $10.08 million when compared to the same quarter last year. In addition, SUMMIT HOTEL PROPERTIES INC has also vastly surpassed the industry average cash flow growth rate of -42.58%.
  • SUMMIT HOTEL PROPERTIES INC's earnings per share declined by 33.3% 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, SUMMIT HOTEL PROPERTIES INC continued to lose money by earning -$0.19 versus -$0.37 in the prior year. This year, the market expects an improvement in earnings ($0.21 versus -$0.19).
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, SUMMIT HOTEL PROPERTIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
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Summit Hotel Properties, LLC engages in the development, ownership, operation, and management of hotel properties in the United States. As of December 31, 2009, it owned and operated 42 mid-scale without food and beverage hotels and 23 upscale hotels in 19 states. Summit Hotel has a market cap of $619.8 million and is part of the financial sector and real estate industry. Shares are down 0.2% year to date as of the close of trading on Friday.

You can view the full Summit Hotel 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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