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 sell to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
- 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 6.4%. Since the same quarter one year prior, revenues slightly increased by 3.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- REXNORD CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, REXNORD CORP increased its bottom line by earning $0.55 versus $0.39 in the prior year. This year, the market expects an improvement in earnings ($1.66 versus $0.55).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 211.9% when compared to the same quarter one year prior, rising from $9.20 million to $28.70 million.
- Net operating cash flow has significantly increased by 107.63% to $84.30 million when compared to the same quarter last year. In addition, REXNORD CORP has also vastly surpassed the industry average cash flow growth rate of -4.30%.
- 39.91% is the gross profit margin for REXNORD CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.86% trails the industry average.
Rexnord Corporation designs, manufactures, markets, and services process and motion control, and water management products worldwide. The company operates through two segments, Process & Motion Control Platform and Water Management Platform. Rexnord has a market cap of $2.76 billion and is part of the industrial goods sector and industrial industry. Shares are up 3.3% 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.