NEW YORK (
-- Cascade Corporation
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, impressive record of earnings per share growth, compelling growth in net income, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- CASC's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CASC has a quick ratio of 1.99, which demonstrates the ability of the company to cover short-term liquidity needs.
- Despite its growing revenue, the company underperformed as compared with the industry average of 50.0%. Since the same quarter one year prior, revenues rose by 44.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Machinery industry average. The net income increased by 189.9% when compared to the same quarter one year prior, rising from $5.67 million to $16.42 million.
- CASCADE 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. During the past fiscal year, CASCADE CORP turned its bottom line around by earning $1.92 versus -$3.58 in the prior year. This year, the market expects an improvement in earnings ($4.83 versus $1.92).
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
Cascade Corporation engages in the manufacture and distribution of material handling load engagement products and related replacement parts, primarily for the lift truck and construction industries worldwide. The company has a P/E ratio of 15.1, equal to the average industrial industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Cascade has a market cap of $480.9 million and is part of the
industry. Shares are down 7.1% year to date as of the close of trading on Friday.
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