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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet, Inc., or any of its contributors.  TheStreet Ratings quantitative algorithm evaluates over 4,300 stocks on a daily basis by 32 different data factors and assigns a unique buy, sell, or hold recommendation on each stock.  Click here to learn more.

NEW YORK (TheStreet) -- Merchants Bancshares Inc/Vt (MBVT) has been upgraded by TheStreet Ratings from Hold to Buy with a ratings score of B.  TheStreet Ratings Team has this to say about their recommendation:

TheStreet Ratings team rates MERCHANTS BANCSHARES INC/VT as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate MERCHANTS BANCSHARES INC/VT (MBVT) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

TheStreet Recommends

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The gross profit margin for MERCHANTS BANCSHARES INC/VT is currently very high, coming in at 93.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.28% is above that of the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.2%. Since the same quarter one year prior, revenues slightly dropped by 2.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • MERCHANTS BANCSHARES INC/VT's earnings per share declined by 36.1% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, MERCHANTS BANCSHARES INC/VT reported lower earnings of $1.91 versus $2.40 in the prior year. This year, the market expects an improvement in earnings ($2.24 versus $1.91).
  • 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. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, MERCHANTS BANCSHARES INC/VT has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • You can view the full analysis from the report here: MBVT Ratings Report