NEW YORK ( TheStreet) -- IESI-BFC (NYSE: BIN) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we find that the company has not been very careful in the management of its balance sheet. Highlights from the ratings report include:
- BIN's debt-to-equity ratio of 0.77 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. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.73 is weak.
- 40.90% is the gross profit margin for IESI-BFC LTD which we consider to be strong. Regardless of BIN'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 4.60% trails the industry average.
- Powered by its strong earnings growth of 54.54% and other important driving factors, this stock has surged by 34.54% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- 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 128.0% when compared to the same quarter one year prior, rising from $8.73 million to $19.91 million.
- BIN's very impressive revenue growth greatly exceeded the industry average of 0.8%. Since the same quarter one year prior, revenues leaped by 63.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.