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, attractive valuation levels, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- TX's revenue growth has slightly outpaced the industry average of 4.6%. Since the same quarter one year prior, revenues rose by 14.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, TX has a quick ratio of 1.73, which demonstrates the ability of the company to cover short-term liquidity needs.
- 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 Metals & Mining industry average. The net income increased by 35.1% when compared to the same quarter one year prior, rising from $77.51 million to $104.70 million.
- Net operating cash flow has significantly increased by 97.09% to $444.91 million when compared to the same quarter last year. In addition, TERNIUM SA -ADR has also vastly surpassed the industry average cash flow growth rate of -51.18%.
Ternium S.A. engages in manufacturing and processing a range of flat and long steel products for construction, home appliances, capital goods, container, food, energy, and automotive industries. The company has a P/E ratio of 9.1, below the average metals & mining industry P/E ratio of 9.3 and below the S&P 500 P/E ratio of 17.7. Ternium SA ADR has a market cap of $4.54 billion and is part of the
industry. Shares are up 21.1% year to date as of the close of trading on Thursday.
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-- Written by a member of TheStreet RatingsStaff