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 revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- HOLI's revenue growth has slightly outpaced the industry average of 5.6%. Since the same quarter one year prior, revenues slightly increased by 8.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- HOLI's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, HOLI has a quick ratio of 2.13, which demonstrates the ability of the company to cover short-term liquidity needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, HOLLYSYS AUTOMATION TECH LTD's return on equity exceeds that of both the industry average and the S&P 500.
- 40.60% is the gross profit margin for HOLLYSYS AUTOMATION TECH LTD which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 25.20% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 1739.35% to $57.77 million when compared to the same quarter last year. In addition, HOLLYSYS AUTOMATION TECH LTD has also vastly surpassed the industry average cash flow growth rate of -40.12%.
Hollysys Automation Technologies Ltd. provides automation and control technologies and applications to customers in the industrial, railway, subway, and nuclear industries in China and south-east Asia. The company has a P/E ratio of 11.6, below the average industrial industry P/E ratio of 13.2 and below the S&P 500 P/E ratio of 17.7. Hollysys Automation has a market cap of $550.3 million and is part of the
industry. Shares are up 16.2% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet RatingsStaff