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 solid stock price performance and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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Highlights from the ratings report include:
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
- CLEARWATER PAPER CORP's earnings per share declined by 31.9% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing 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 ($2.98 versus $1.67).
- CLW, with its decline in revenue, underperformed when compared the industry average of 8.6%. Since the same quarter one year prior, revenues slightly dropped by 1.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The gross profit margin for CLEARWATER PAPER CORP is rather low; currently it is at 16.20%. Regardless of CLW's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.80% trails the industry average.
Clearwater Paper Corporation manufactures and sells 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 22.6, equal to the average consumer non-durables industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Clearwater has a market cap of $833.1 million and is part of the
industry. Shares are down 0.7% year to date as of the close of trading on Wednesday.
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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.