NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, robust revenue growth, 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 generally poor debt management on most measures that we evaluated.
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Highlights from the ratings report include:
- 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. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Containers & Packaging industry. The net income increased by 813.4% when compared to the same quarter one year prior, rising from -$0.68 million to $4.84 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 23.9%. Since the same quarter one year prior, revenues rose by 19.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Containers & Packaging industry and the overall market, AEP INDUSTRIES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 57.72% to -$4.63 million when compared to the same quarter last year. In addition, AEP INDUSTRIES INC has also vastly surpassed the industry average cash flow growth rate of -11.85%.
AEP Industries Inc. engages in the production, manufacture, and distribution of plastic packaging products in the United States and Canada. The company has a P/E ratio of 12.3, equal to the average consumer non-durables industry P/E ratio and below the S&P 500 P/E ratio of 17.7. AEP has a market cap of $202.1 million and is part of the
industry. Shares are up 30.1% year to date as of the close of trading on Tuesday.
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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.