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 robust revenue growth and attractive valuation levels. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 0.9%. Since the same quarter one year prior, revenues rose by 35.0%. 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.
- CLEARWATER PAPER CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, CLEARWATER PAPER CORP reported lower earnings of $1.67 versus $3.13 in the prior year. This year, the market expects an improvement in earnings ($3.00 versus $1.67).
- The change in net income from the same quarter one year ago has significantly exceeded that of the Paper & Forest Products industry average, but is less than that of the S&P 500. The net income has significantly decreased by 69.6% when compared to the same quarter one year ago, falling from $37.79 million to $11.50 million.
- The debt-to-equity ratio of 1.08 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, CLW has managed to keep a strong quick ratio of 1.62, which demonstrates the ability to cover short-term cash needs.
Clearwater Paper Corporation engages in the manufacture and sale of pulp-based products in the United States and internationally. The company operates in two segments, Consumer Products, and Pulp and Paperboard. The company has a P/E ratio of 21.3, above the average consumer non-durables industry P/E ratio of 13.6 and above the S&P 500 P/E ratio of 17.7. Clearwater has a market cap of $862.1 million and is part of the
industry. Shares are up 0.1% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet RatingsStaff