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 largely solid financial position with reasonable debt levels by most measures, notable return on equity and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- PACR 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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.22, which illustrates the ability to avoid short-term cash problems.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Air Freight & Logistics industry and the overall market on the basis of return on equity, PACER INTERNATIONAL INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- PACR, with its decline in revenue, underperformed when compared the industry average of 9.5%. Since the same quarter one year prior, revenues slightly dropped by 3.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- PACER INTERNATIONAL INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PACER INTERNATIONAL INC increased its bottom line by earning $0.40 versus $0.03 in the prior year. For the next year, the market is expecting a contraction of 6.3% in earnings ($0.38 versus $0.40).
Pacer International, Inc., together with its subsidiaries, provides asset-light transportation and logistics services primarily in North America, Asia, Europe, Australia, South America, and Africa. It operates in two segments, Intermodal and Logistics. The company has a P/E ratio of 17.1, equal to the average transportation industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Pacer International has a market cap of $239.3 million and is part of the
industry. Shares are up 27.9% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet RatingsStaff