The agreement will see the Japanese company acquire all shares of Beam for $83.50 in cash. The purchase price is a 25% premium to Beam's closing price of $66.97 on Jan. 10. The acquisition should close in the second-quarter of 2014, pending Beam stockholder approval and regulatory approvals.
TheStreet Ratings team rates BEAM INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate BEAM INC (BEAM) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly increased by 63.04% to $142.50 million when compared to the same quarter last year. In addition, BEAM INC has also vastly surpassed the industry average cash flow growth rate of -6.19%.
- The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.77 is somewhat weak and could be cause for future problems.
- BEAM INC's earnings per share declined by 14.8% 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, BEAM INC increased its bottom line by earning $2.51 versus $0.84 in the prior year. This year, the market expects an improvement in earnings ($2.58 versus $2.51).
- The gross profit margin for BEAM INC is rather high; currently it is at 62.23%. Regardless of BEAM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 14.16% trails the industry average.
- BEAM, with its decline in revenue, slightly underperformed the industry average of 1.9%. Since the same quarter one year prior, revenues slightly dropped by 4.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: BEAM Ratings Report
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