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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link

.

NEW YORK (

TheStreet

)

-- AMCOL International Corporation

(NYSE:

ACO

) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.

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Highlights from the ratings report include:

  • ACO's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 9.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 115.5% when compared to the same quarter one year prior, rising from $11.00 million to $23.70 million.
  • Net operating cash flow has increased to $43.60 million or 20.77% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -4.68%.
  • AMCOL INTERNATIONAL CORP 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, AMCOL INTERNATIONAL CORP reported lower earnings of $1.07 versus $2.00 in the prior year. This year, the market expects an improvement in earnings ($2.29 versus $1.07).
  • Despite currently having a low debt-to-equity ratio of 0.55, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that ACO's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.26 is high and demonstrates strong liquidity.

AMCOL International Corporation engages in the development and application of minerals and technology products and services to various industrial and consumer markets. It operates in four segments: Minerals and Materials, Environmental, Oilfield Services, and Transportation. The company has a P/E ratio of 48.5, above the S&P 500 P/E ratio of 17.7. AMCOL International has a market cap of $1.1 billion and is part of the basic materials sector and metals & mining industry. Shares are up 0.3% year to date as of the close of trading on Monday.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.