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, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- GRUPO SIMEC SA DE CV 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 year. We feel that this trend should continue. During the past fiscal year, GRUPO SIMEC SA DE CV turned its bottom line around by earning $0.44 versus -$0.15 in the prior year. This year, the market expects an improvement in earnings ($2.77 versus $0.44).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 290.1% when compared to the same quarter one year prior, rising from $9.62 million to $37.53 million.
- 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 2.22, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 163.39% to $92.25 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 60.53%.
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. The company has a P/E ratio of 15.3, above the average metals & mining industry P/E ratio of 7.4 and below the S&P 500 P/E ratio of 17.7. Grupo Simec S.A.B. de C.V has a market cap of $1.1 billion and is part of the
industry. Shares are down 14.2% year to date as of the close of trading on Tuesday.
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