The firm said it initiated coverage on the company, which manufactures and distributes products for commercial, industrial, and consumer markets, based on its belief the TriMas is well below peak profitability.
"We view TriMas as one of the few remaining restructuring stories at which a mere normalization on operations, halfway back to historical levels, and free cash flow conversion, represents attractive upside, with a heroic top line," JPMorgan said.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
JPMorgan said it anticipates around a 30% growth in the company's free cash flow.
Separately, TheStreet Ratings team rates TRIMAS CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate TRIMAS CORP (TRS) a BUY. This is driven by multiple 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, good cash flow from operations, 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 sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TRS's revenue growth has slightly outpaced the industry average of 2.3%. Since the same quarter one year prior, revenues slightly increased by 7.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 51.08% to $41.91 million when compared to the same quarter last year. In addition, TRIMAS CORP has also vastly surpassed the industry average cash flow growth rate of -21.94%.
- TRIMAS CORP's earnings per share declined by 42.3% in the most recent quarter compared to 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, TRIMAS CORP increased its bottom line by earning $1.85 versus $0.92 in the prior year. This year, the market expects an improvement in earnings ($1.91 versus $1.85).
- The current debt-to-equity ratio, 0.57, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.96 is somewhat weak and could be cause for future problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Machinery industry and the overall market, TRIMAS CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: TRS Ratings Report