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 compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Transportation Infrastructure industry. The net income increased by 6604.7% when compared to the same quarter one year prior, rising from -$0.11 million to $6.96 million.
- OMAB's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.46, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for GRUPO AEROPORTUARIO DEL CENT is rather high; currently it is at 63.40%. It has increased significantly from the same period last year. Along with this, the net profit margin of 21.10% is above that of the industry average.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Transportation Infrastructure industry and the overall market on the basis of return on equity, GRUPO AEROPORTUARIO DEL CENT has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- GRUPO AEROPORTUARIO DEL CENT has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, GRUPO AEROPORTUARIO DEL CENT increased its bottom line by earning $0.90 versus $0.72 in the prior year. For the next year, the market is expecting a contraction of 3.9% in earnings ($0.87 versus $0.90).
Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., together with its subsidiaries, operates, maintains, and develops airports primarily in the central and northern regions of Mexico. The company has a P/E ratio of 15.3, above the average transportation industry P/E ratio of 15.1 and below the S&P 500 P/E ratio of 17.7. Grupo Aeroportuario del Centro Norte S.A.B has a market cap of $679 million and is part of the
industry. Shares are down 12.4% year to date as of the close of trading on Thursday.
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