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NEW YORK (TheStreet) -- Shares of Simpson Manufacturing Co. (SSD) finished up 2.12% to $33.31 on Friday after a ratings upgrade to "buy" from "neutral" at DA Davidson.

The upgrade for the company, which designs, engineers and sells products constructed from wood, came one day after it released its 2014 first quarter earnings report.

The company reported net sales of $168.3 million, a 9.1% increase from the $154.3 million reported during the first quarter of 2013.

Simpson had net income of $12.1 million for the first quarter, compared to $4.8 million for the same quarter in 2013.

Diluted net income was 25 cents per common share for the quarter, versus 10 cents per common share during the first quarter of 2013.

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TheStreet Ratings team rates SIMPSON MANUFACTURING INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate SIMPSON MANUFACTURING INC (SSD) 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SSD's revenue growth has slightly outpaced the industry average of 3.1%. Since the same quarter one year prior, revenues rose by 10.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SSD's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.31, which clearly demonstrates the ability to cover short-term cash needs.
  • SIMPSON MANUFACTURING INC has improved earnings per share by 33.3% 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, SIMPSON MANUFACTURING INC increased its bottom line by earning $1.05 versus $0.87 in the prior year. This year, the market expects an improvement in earnings ($1.39 versus $1.05).
  • 47.33% is the gross profit margin for SIMPSON MANUFACTURING INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 4.78% is above that of the industry average.
  • Net operating cash flow has significantly increased by 204.48% to $34.59 million when compared to the same quarter last year. In addition, SIMPSON MANUFACTURING INC has also vastly surpassed the industry average cash flow growth rate of -4.94%.
  • You can view the full analysis from the report here: SSD Ratings Report

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