NEW YORK ( TheStreet) -- Heritage-Crystal Clean (Nasdaq: HCCI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, revenue growth, compelling growth in net income, solid stock price performance and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The gross profit margin for HERITAGE-CRYSTAL CLEAN INC is currently very high, coming in at 75.50%. Regardless of HCCI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.60% trails the industry average.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Services & Supplies industry. The net income increased by 81.8% when compared to the same quarter one year prior, rising from $0.52 million to $0.95 million.
  • The revenue growth came in higher than the industry average of 0.8%. Since the same quarter one year prior, revenues rose by 20.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Despite the fact that HCCI's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.46 is high and demonstrates strong liquidity.

Heritage-Crystal Clean, Inc. provides industrial and hazardous waste services to small and mid-sized customers in the United States. It offers a range of services, including parts cleaning, containerized waste management, used oil collection, and vacuum truck services. The company has a P/E ratio of 43.8, equal to the average materials & construction industry P/E ratio and above the S&P 500 P/E ratio of 17.2. Heritage-Crystal Clean has a market cap of $163.3 million and is part of the industrial goods sector and materials & construction industry. Shares are up 12% year to date as of the close of trading on Friday.

You can view the full Heritage-Crystal Clean Ratings Report or get investment ideas from our investment research center.

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Heritage-Crystal Clean (HCCI) Downgraded From Buy to Hold