The following ratings changes were generated on Wednesday, Dec. 31.
First Cash Financial Services
, which provides consumer financial services and related specialty retail products through pawn stores in the United States and Mexico, from hold to buy. This upgrade is driven by a few notable strengths, such as the company's robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
The revenue growth came in higher than the industry average of 1.1%. Since the same quarter one year prior, revenues rose by 17.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
The current debt-to-equity ratio, 0.51, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 2.69, which clearly demonstrates the ability to cover short-term cash needs.
Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Consumer Finance industry and the overall market, First Cash Financial's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
Net operating cash flow has significantly increased by 827.17% to $6.77 million when compared to the same quarter last year. In addition, First Cash Financial has also vastly surpassed the industry average cash flow growth rate of -32.85%.
The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
, which develops medical device for interventional cardiologists and radiologists in the United States and internationally, from hold to buy. This upgrade is driven by a few notable strengths, such as the company's robust revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, good cash flow from operations and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
Vascular's revenue growth has slightly outpaced the industry average of 15.6%. Since the same quarter one year prior, revenues rose by 17.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
Vascular has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, Vascular has a quick ratio of 1.67, which demonstrates the ability of the company to cover short-term liquidity needs.
The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 11380.0% when compared to the same quarter one year prior, rising from $0.02 million to $1.72 million.
Net operating cash flow has significantly increased by 115.42% to $1.19 million when compared to the same quarter last year. In addition, Vascular has also vastly surpassed the industry average cash flow growth rate of 21.71%.
This stock has managed to rise its share value by 35.30% over the past twelve months. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
, which engages in the retail distribution of electricity in the southeastern seacoast and capital city areas of New Hampshire, from buy to hold. The primary factors that have impacted our rating are mixed. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a decline in the stock price during the past year, generally poor debt management and poor profit margins.
Unitil's revenue growth has slightly outpaced the industry average of 9.2%. Since the same quarter one year prior, revenues rose by 11.8%. 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.
Unitil earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, Unitil increased its bottom line by earning $1.52 versus $1.41 in the prior year. This year, the market expects an improvement in earnings ($1.55 versus $1.52).
Net operating cash flow has increased to $7.30 million or 10.60% when compared to the same quarter last year. Despite an increase in cash flow, Unitil's cash flow growth rate is still lower than the industry average growth rate of 25.03%.
Unitil's share price has plunged 28.56% over the past year. The probable causes include at least two: First, the broader market, which declined even more sharply than Unitil's. And second, the company reported weak earnings per share results. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, Unitil is still more expensive than most of the other companies in its industry.
Each business day, TheStreet.com Ratings updates its ratings on the stocks it covers. The proprietary ratings model projects a stock's total return potential over a 12-month period, including both price appreciation and dividends. Buy, hold or sell ratings designate how the Ratings group expects these stocks to perform against a general benchmark of the equities market and interest rates. While the ratings model is quantitative, it uses both subjective and objective elements. For instance, subjective elements include expected equities market returns, future interest rates, implied industry outlook and company earnings forecasts. Objective elements include volatility of past operating revenue, financial strength and company cash flows. However, the rating does not incorporate all of the factors that can alter a stock's performance. For example, it doesn't always factor in recent corporate or industry events that could affect the stock price, nor does it include recent technology developments and competitive dynamics that may affect the company. For those reasons, we believe a rating alone cannot tell the whole story, and that it should be part of an investor's overall research.