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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 impressive record of earnings per share growth, revenue growth, good cash flow from operations, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- EXTERRAN HOLDINGS INC 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, EXTERRAN HOLDINGS INC continued to lose money by earning -$1.68 versus -$5.27 in the prior year. This year, the market expects an improvement in earnings ($1.03 versus -$1.68).
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.1%. Since the same quarter one year prior, revenues slightly increased by 8.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Net operating cash flow has significantly increased by 62.83% to $147.62 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 22.80%.
- Powered by its strong earnings growth of 800.00% and other important driving factors, this stock has surged by 53.68% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- 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 Energy Equipment & Services industry and the overall market, EXTERRAN HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
Exterran Holdings, Inc., together with its subsidiaries, provides operations, maintenance, service, and equipment for the oil and natural gas production, processing, and transportation applications. Exterran has a market cap of $2.4 billion and is part of the basic materials sector and energy industry. Shares are up 6.7% year to date as of the close of trading on Wednesday.
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