NEW YORK (
-- OM Group
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 4.0%. Since the same quarter one year prior, revenues rose by 49.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.55, 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 1.33, which illustrates the ability to avoid short-term cash problems.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 113.9% when compared to the same quarter one year prior, rising from $23.78 million to $50.88 million.
- Net operating cash flow has significantly increased by 209.21% to $38.29 million when compared to the same quarter last year. In addition, OM GROUP INC has also vastly surpassed the industry average cash flow growth rate of 4.92%.
- OM GROUP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, OM GROUP INC reported lower earnings of $1.22 versus $2.70 in the prior year. This year, the market expects an improvement in earnings ($3.95 versus $1.22).
OM Group, Inc. develops, produces, and markets specialty chemicals, advanced materials, and electrochemical energy storage products worldwide. The company operates in three segments: Advanced Materials, Specialty Chemicals, and Battery Technologies. The company has a P/E ratio of 87.1, above the average chemicals industry P/E ratio of 67.1 and above the S&P 500 P/E ratio of 17.7. OM Group has a market cap of $889.2 million and is part of the
industry. Shares are up 36.2% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet RatingsStaff