NEW YORK (
-- Group Simec SAB de CV
) 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, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- GRUPO SIMEC SA DE CV's earnings per share declined by 14.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GRUPO SIMEC SA DE CV turned its bottom line around by earning $0.67 versus -$0.15 in the prior year. This year, the market expects an improvement in earnings ($3.23 versus $0.67).
- Net operating cash flow has significantly increased by 811.99% to $25.40 million when compared to the same quarter last year. In addition, GRUPO SIMEC SA DE CV has also vastly surpassed the industry average cash flow growth rate of 117.79%.
- SIM's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, SIM has a quick ratio of 1.76, which demonstrates the ability of the company to cover short-term liquidity needs.
- The revenue growth significantly trails the industry average of 47.5%. Since the same quarter one year prior, revenues slightly increased by 6.0%. 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.
Grupo Simec, S.A.B. de C.V. engages in the manufacture, processing, and distribution of special bar quality (SBQ) and structural steel products primarily in the United States, Mexico, and Canada. Group Simec SAB de CV has a market cap of $1.4 billion and is part of the
industry. Shares are up 2.7% year to date as of the previous trading day's close.
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