NEW YORK (TheStreet) -- Interpublic Group of Companies (IPG - Get Report) hit a 52-week high of $20.35 on Thursday after a regulatory filing revealed activist hedge fund Elliott Management had taken a 6.7% stake in the advertising company.
The New York Times DealBook reports Elliott, owned by billionaire Paul E. Singer, is planning to push IPG to sell itself to a competitor.
The stock was up 1.26% to $20.10 at 11:56 a.m. IPG traded above $20 on Thursday for the first time since Aug. 2002.
Separately, TheStreet Ratings team rates INTERPUBLIC GROUP OF COS as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate INTERPUBLIC GROUP OF COS (IPG) a BUY. This is driven by several positive factors, 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 increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 62.9% when compared to the same quarter one year prior, rising from -$56.30 million to -$20.90 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 14.7%. Since the same quarter one year prior, revenues slightly increased by 6.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.77, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.91 is somewhat weak and could be cause for future problems.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
- INTERPUBLIC GROUP OF COS reported significant earnings per share improvement 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, INTERPUBLIC GROUP OF COS reported lower earnings of $0.59 versus $0.95 in the prior year. This year, the market expects an improvement in earnings ($1.01 versus $0.59).
- You can view the full analysis from the report here: IPG Ratings Report