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NEW YORK (TheStreet) -- Southern Copper (SCCO) - Get Report has been upgraded by TheStreet Ratings from Hold to Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SOUTHERN COPPER CORP (SCCO) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins, increase in stock price during the past year, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 48.83% is the gross profit margin for SOUTHERN COPPER CORP which we consider to be strong. Regardless of SCCO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SCCO's net profit margin of 23.65% significantly outperformed against the industry.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Despite the weak revenue results, SCCO has outperformed against the industry average of 19.1%. Since the same quarter one year prior, revenues slightly dropped by 4.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- SCCO's debt-to-equity ratio of 0.72 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. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.16 is sturdy.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Metals & Mining industry and the overall market, SOUTHERN COPPER CORP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- You can view the full analysis from the report here: SCCO Ratings Report