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, revenue growth, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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Highlights from the ratings report include:
- FOSTER (LB) CO 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 two years. We feel that this trend should continue. During the past fiscal year, FOSTER (LB) CO increased its bottom line by earning $2.23 versus $1.98 in the prior year. This year, the market expects an improvement in earnings ($2.85 versus $2.23).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 396.2% when compared to the same quarter one year prior, rising from $0.68 million to $3.37 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 1.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- FSTR's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, FSTR has a quick ratio of 1.80, which demonstrates the ability of the company to cover short-term liquidity needs.
L. B. Foster Company engages in the manufacture, fabrication, and distribution of products and services for the rail, construction, energy, and utility markets in the United States. It operates in three segments: Rail Products, Construction Products, and Tubular Products. The company has a P/E ratio of 11.6, equal to the average wholesale industry P/E ratio and below the S&P 500 P/E ratio of 17.7. LB Foster has a market cap of $292.2 million and is part of the
industry. Shares are up 3.4% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.