NEW YORK ( TheStreet) -- Southern National Bancorp of Virginia (Nasdaq: SONA) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, SOUTHERN NATIONAL BANCORP VA underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Banks industry. The net income increased by 7.6% when compared to the same quarter one year prior, going from $1.04 million to $1.12 million.
- SONA, with its decline in revenue, slightly underperformed the industry average of 1.7%. Since the same quarter one year prior, revenues fell by 10.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- SOUTHERN NATIONAL BANCORP VA has improved earnings per share by 11.1% 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, SOUTHERN NATIONAL BANCORP VA reported lower earnings of $0.17 versus $0.27 in the prior year. This year, the market expects an improvement in earnings ($0.30 versus $0.17).
- The gross profit margin for SOUTHERN NATIONAL BANCORP VA is rather high; currently it is at 63.50%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, SONA's net profit margin of 13.90% significantly trails the industry average.