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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link

.

NEW YORK (

TheStreet

)

-- Leading Brands

(Nasdaq:

LBIX

) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year and attractive valuation levels. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

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Highlights from the ratings report include:

  • LBIX's revenue growth has slightly outpaced the industry average of 1.2%. Since the same quarter one year prior, revenues slightly increased by 5.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • LBIX's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.91 is somewhat weak and could be cause for future problems.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Beverages industry average, but is greater than that of the S&P 500. The net income increased by 67.6% when compared to the same quarter one year prior, rising from $0.41 million to $0.69 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Beverages industry and the overall market, LEADING BRANDS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

Leading Brands, Inc., together with its subsidiaries, engages in the development, production, marketing, and distribution of beverages in Canada, the Western United States, and Asia. Leading has a market cap of $14.6 million and is part of the consumer goods sector and food & beverage industry. Shares are up 30.3% year to date as of the close of trading on Wednesday.

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Leading Ratings Report

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.