NEW YORK ( TheStreet) -- AMCOL International Corporation (NYSE: ACO) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • AMCOL INTERNATIONAL CORP reported significant earnings per share improvement 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, AMCOL INTERNATIONAL CORP reported lower earnings of $0.96 versus $1.13 in the prior year. This year, the market expects an improvement in earnings ($1.93 versus $0.96).
  • Powered by its strong earnings growth of 90.00% and other important driving factors, this stock has surged by 26.92% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp 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 other strengths this company displays justify these higher price levels.
  • Despite currently having a low debt-to-equity ratio of 0.58, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that ACO's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.02 is high and demonstrates strong liquidity.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 35.7%. Since the same quarter one year prior, revenues rose by 27.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 99.7% when compared to the same quarter one year prior, rising from $6.13 million to $12.24 million.

Amcol International Corporation focuses on the development and application of minerals and technology products and services to various industrial and consumer markets worldwide. The company operates in four segments: Minerals and Materials, Environmental, Oilfield Services, and Transportation. The company has a P/E ratio of 36.4, equal to the average materials & construction industry P/E ratio and above the S&P 500 P/E ratio of 16.7. AMCOL International has a market cap of $1.1 billion and is part of the industrial goods sector and materials & construction industry. Shares are up 23.5% year to date as of the close of trading on Tuesday.

You can view the full AMCOL International Ratings Report or get investment ideas from our investment research center.
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