NEW YORK ( TheStreet) -- Unico American Corporation (Nasdaq: UNAM) 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, reasonable valuation levels, growth in earnings per share, increase in stock price during the past year 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:
- In its most recent trading session, UNAM has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- The revenue fell significantly faster than the industry average of 19.8%. Since the same quarter one year prior, revenues fell by 13.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- UNICO AMERICAN CORP has improved earnings per share by 27.3% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, UNICO AMERICAN CORP reported lower earnings of $0.43 versus $0.52 in the prior year.
- UNAM has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.