Editor's Note: 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.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B+. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.
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Highlights from the ratings report include:
- The current debt-to-equity ratio, 0.49, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.37, which illustrates the ability to avoid short-term cash problems.
- NUCOR CORP's earnings per share declined by 43.5% 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 year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, NUCOR CORP reported lower earnings of $1.59 versus $2.44 in the prior year. This year, the market expects an improvement in earnings ($1.84 versus $1.59).
- NUE, with its decline in revenue, slightly underperformed the industry average of 3.3%. Since the same quarter one year prior, revenues fell by 10.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- NUE's share price has surged by 28.28% over the past year, reflecting the market's general trend, despite their weak earnings growth during the last quarter. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- The change in net income from the same quarter one year ago has significantly exceeded that of the Metals & Mining industry average, but is less than that of the S&P 500. The net income has significantly decreased by 41.6% when compared to the same quarter one year ago, falling from $145.10 million to $84.79 million.
Nucor Corporation, together with its subsidiaries, engages in the manufacture and sale of steel and steel products in North America and internationally. It operates through three segments: Steel Mills, Steel Products, and Raw Materials. Nucor has a market cap of $14.6 billion and is part of the basic materials sector and metals & mining industry. The company has a P/E ratio of 33.00, above the S&P 500 P/E ratio of 18.00. Shares are up 6.8% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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