NEW YORK ( TheStreet) -- Sifco Industries (AMEX: SIF) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, solid stock price performance 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:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Aerospace & Defense industry. The net income increased by 98.7% when compared to the same quarter one year prior, rising from $1.00 million to $2.00 million.
- Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 34.67% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SIF should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- SIF's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, SIF has a quick ratio of 1.61, which demonstrates the ability of the company to cover short-term liquidity needs.
- The revenue growth greatly exceeded the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 34.8%. Growth in the company's revenue appears to have helped boost the earnings per share.