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, increase in net income, expanding profit margins and good cash flow from operations. 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 43.4%. Since the same quarter one year prior, revenues rose by 13.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- SLRC's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Capital Markets industry average. The net income increased by 22.4% when compared to the same quarter one year prior, going from $42.36 million to $51.86 million.
- The gross profit margin for SOLAR CAPITAL LTD is rather high; currently it is at 65.70%. Regardless of SLRC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SLRC's net profit margin of 144.10% significantly outperformed against the industry.
- Net operating cash flow has increased to -$28.52 million or 45.95% when compared to the same quarter last year. Despite an increase in cash flow of 45.95%, SOLAR CAPITAL LTD is still growing at a significantly lower rate than the industry average of 160.51%.
Solar Capital Ltd. is a business development company specializing in investments in leveraged companies, including middle market companies. The company has a P/E ratio of 14.1, below the average financial services industry P/E ratio of 14.9 and below the S&P 500 P/E ratio of 17.7. Solar has a market cap of $827.2 million and is part of the
industry. Shares are up 5.9% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet RatingsStaff