Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
NEW YORK (
-- Fuel Tech
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 5.7%. Since the same quarter one year prior, revenues rose by 34.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- FTEK's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.76, which clearly demonstrates the ability to cover short-term cash needs.
- Powered by its strong earnings growth of 200.00% and other important driving factors, this stock has surged by 47.19% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FTEK should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- 47.30% is the gross profit margin for FUEL TECH INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.37% is above that of the industry average.
Fuel Tech, Inc. provides boiler optimization, efficiency improvement, and air pollution reduction and control solutions to utility and industrial customers worldwide. The company has a P/E ratio of 32.9, above the S&P 500 P/E ratio of 17.7. Fuel Tech has a market cap of $154.7 million and is part of the industrial goods sector and industrial industry. Shares are down 2.5% year to date as of the close of trading on Thursday.
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