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 robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, KEMET CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 258.5% when compared to the same quarter one year prior, rising from -$20.10 million to $31.85 million.
- KEMET CORP 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, KEMET CORP turned its bottom line around by earning $0.86 versus -$2.58 in the prior year. This year, the market expects an improvement in earnings ($2.13 versus $0.86).
- Powered by its strong earnings growth of 181.33% and other important driving factors, this stock has surged by 27.39% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, KEM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 18.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
KEMET Corporation, together with its subsidiaries, manufactures and sells capacitors worldwide. Its products include tantalum, multilayer ceramic, film, electrolytic, paper, and solid aluminum capacitors. The company has a P/E ratio of 9.5, equal to the average electronics industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Kemet has a market cap of $512.1 million and is part of the
industry. Shares are down 13.2% year to date as of the close of trading on Thursday.
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