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 (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 8.9%. Since the same quarter one year prior, revenues rose by 36.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- NVEC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.88, which clearly demonstrates the ability to cover short-term cash needs.
- Powered by its strong earnings growth of 56.60% and other important driving factors, this stock has surged by 28.53% 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, NVEC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The gross profit margin for NVE CORP is currently very high, coming in at 84.30%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 47.75% significantly outperformed against the industry average.
- Net operating cash flow has increased to $4.48 million or 23.87% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -15.45%.
NVE Corporation is engaged in the development and sale of devices that use spintronics, a nanotechnology, which relies on electron spin rather than electron charge to acquire, store, and transmit information. NVE has a market cap of $309.2 million and is part of the technology sector and electronics industry. Shares are up 13.2% year to date as of the close of trading on Thursday.
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