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Editor's Note: 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

.

NEW YORK (

TheStreet

)

-- Franklin Financial

(Nasdaq:

FRNK

) 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, revenue growth, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

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Highlights from the ratings report include:

  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • The revenue growth significantly trails the industry average of 201.0%. Since the same quarter one year prior, revenues rose by 10.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for FRANKLIN FINANCIAL CORP/VA is currently very high, coming in at 70.50%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.95% is above that of the industry average.
  • Net operating cash flow has increased to $4.50 million or 37.32% when compared to the same quarter last year. In addition, FRANKLIN FINANCIAL CORP/VA has also vastly surpassed the industry average cash flow growth rate of -450.02%.
  • FRANKLIN FINANCIAL CORP/VA has improved earnings per share by 21.1% 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 year. During the past fiscal year, FRANKLIN FINANCIAL CORP/VA increased its bottom line by earning $0.49 versus $0.08 in the prior year.

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Franklin Financial Corporation operates as a holding company for Franklin Federal Savings Bank that offers financial services to consumers and businesses. Its deposit products include passbook savings, money market savings, and money market checking accounts, as well as certificates of deposit. The company has a P/E ratio of 30.6, above the S&P 500 P/E ratio of 17.7. Franklin Financial has a market cap of $231.8 million and is part of the financial sector and banking industry. Shares are up 10.4% year to date as of the close of trading on Friday.

You can view the full

Franklin Financial Ratings Report

or get investment ideas from our

investment research center

.

-- Written by a member of TheStreet Ratings Staff

Editor's Note: 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

.

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