The firm said it initiated coverage with a strong rating as it believes the consumer packaged food and beverage company has strong sales and margin expansion.
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Separately, TheStreet Ratings team rates WHITEWAVE FOODS CO as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate WHITEWAVE FOODS CO (WWAV) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share and increase in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 2.7%. Since the same quarter one year prior, revenues rose by 36.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- WHITEWAVE FOODS CO has improved earnings per share by 5.5% 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, WHITEWAVE FOODS CO increased its bottom line by earning $0.56 versus $0.31 in the prior year. This year, the market expects an improvement in earnings ($1.00 versus $0.56).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Food Products industry average. The net income increased by 10.2% when compared to the same quarter one year prior, going from $31.21 million to $34.41 million.
- The debt-to-equity ratio of 1.27 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, WWAV has a quick ratio of 0.55, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Food Products industry and the overall market, WHITEWAVE FOODS CO's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: WWAV Ratings Report
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