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NEW YORK (TheStreet) -- Sucampo Pharmaceuticals (SCMP) 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 SUCAMPO PHARMACEUTICALS INC (SCMP) 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 solid stock price performance, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, SCMP's share price has jumped by 27.56%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- Net operating cash flow has significantly increased by 303.04% to $0.53 million when compared to the same quarter last year. In addition, SUCAMPO PHARMACEUTICALS INC has also vastly surpassed the industry average cash flow growth rate of -60.71%.
- SUCAMPO PHARMACEUTICALS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SUCAMPO PHARMACEUTICALS INC increased its bottom line by earning $0.15 versus $0.11 in the prior year. This year, the market expects an improvement in earnings ($0.32 versus $0.15).
- SCMP's debt-to-equity ratio of 0.71 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 2.64 is very high and demonstrates very strong liquidity.
- SCMP, with its decline in revenue, slightly underperformed the industry average of 8.4%. Since the same quarter one year prior, revenues fell by 10.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: SCMP Ratings Report