NEW YORK (
-- Intrepid Potash
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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 Chemicals industry. The net income increased by 171.1% when compared to the same quarter one year prior, rising from $6.71 million to $18.18 million.
- Net operating cash flow has significantly increased by 102.76% to $46.79 million when compared to the same quarter last year. In addition, INTREPID POTASH INC has also vastly surpassed the industry average cash flow growth rate of -35.41%.
- 46.90% is the gross profit margin for INTREPID POTASH INC which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 18.90% is above that of the industry average.
- IPI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.37, which clearly demonstrates the ability to cover short-term cash needs.
- The revenue growth came in higher than the industry average of 20.7%. Since the same quarter one year prior, revenues rose by 31.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
Intrepid Potash, Inc., together with its subsidiaries, engages in the production and marketing of muriate of potash or potassium chloride, and langbeinite under the Trio brand name primarily in the United States. The company has a P/E ratio of 57.9, equal to the average chemicals industry P/E ratio and above the S&P 500 P/E ratio of 16.7. Intrepid Potash has a market cap of $2.6 billion and is part of the
industry. Shares are down 9.9% year to date as of the close of trading on Thursday.
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