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, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 0.0%. Since the same quarter one year prior, revenues rose by 18.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- POST's debt-to-equity ratio of 0.94 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.58 is very high and demonstrates very strong liquidity.
- Compared to its closing price of one year ago, POST's share price has jumped by 47.45%, exceeding the performance of the broader market during that same time frame. 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.
- Net operating cash flow has slightly increased to $53.00 million or 8.82% when compared to the same quarter last year. Despite an increase in cash flow, POST HOLDINGS INC's average is still marginally south of the industry average growth rate of 11.27%.
- 47.99% is the gross profit margin for POST HOLDINGS INC which we consider to be strong. Regardless of POST's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, POST's net profit margin of -0.30% significantly underperformed when compared to the industry average.
Post Holdings, Inc. manufactures, markets, and distributes ready-to-eat cereals, snacks, and active nutrition products in the United States and Canada. The company has a P/E ratio of 181.3, above the S&P 500 P/E ratio of 17.7. Post has a market cap of $1.78 billion and is part of the consumer goods sector and food & beverage industry. Shares are up 9.6% year to date as of the close of trading on Wednesday.
You can view the full
or get investment ideas from our
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.