NEW YORK (
-- ACCO Brands
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and generally higher debt management risk.
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Highlights from the ratings report include:
- ACCO's revenue growth has slightly outpaced the industry average of 29.5%. Since the same quarter one year prior, revenues rose by 32.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ACCO BRANDS CORP reported significant earnings per share improvement 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ACCO BRANDS CORP increased its bottom line by earning $0.32 versus $0.13 in the prior year. This year, the market expects an improvement in earnings ($1.06 versus $0.32).
- The gross profit margin for ACCO BRANDS CORP is currently lower than what is desirable, coming in at 32.80%. It has decreased from the same quarter the previous year. Despite the weak results of the gross profit margin, the net profit margin of 21.50% has significantly outperformed against the industry average.
- Net operating cash flow has significantly decreased to -$121.30 million or 490.03% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
ACCO Brands Corporation engages in the design, manufacture, marketing, and distribution of office products primarily in the United States, Australia, the United Kingdom, and Canada. The company has a P/E ratio of 51.9, above the average consumer non-durables industry P/E ratio of 10.9 and above the S&P 500 P/E ratio of 17.7. ACCO has a market cap of $996.5 million and is part of the
industry. Shares are down 22.2% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff
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.