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 and growth in earnings per share. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 12.3%. Since the same quarter one year prior, revenues slightly increased by 9.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, PATR has a quick ratio of 1.78, which demonstrates the ability of the company to cover short-term liquidity needs.
- PATRIOT TRANSN HOLDING INC has improved earnings per share by 6.3% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, PATRIOT TRANSN HOLDING INC's EPS of $0.75 remained unchanged from the prior years' EPS of $0.75. This year, the market expects an improvement in earnings ($0.84 versus $0.75).
- After a year of stock price fluctuations, the net result is that PATR's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Despite the decline in its share price over the last year, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry. We feel, however, that other strengths this company displays compensate for this.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Road & Rail industry average. The net income has decreased by 2.4% when compared to the same quarter one year ago, dropping from $1.68 million to $1.64 million.
Patriot Transportation Holding, Inc. and its subsidiaries engage in the transportation and real estate businesses in the United States. It operates through three segments: Transportation, Mining Royalty Land, and Developed Property Rentals. The company has a P/E ratio of 28.7, equal to the average transportation industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Patriot Transportation has a market cap of $223.1 million and is part of the
industry. Shares are up 9.7% year to date as of the close of trading on Monday.
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-- Written by a member of TheStreet Ratings Staff
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.