NEW YORK ( TheStreet) -- Deer Consumer Products (Nasdaq: DEER) 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, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$10.87 million or 772.63% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • In its most recent trading session, DEER 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. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The gross profit margin for DEER CONSUMER PRODUCTS INC is currently lower than what is desirable, coming in at 30.70%. Regardless of DEER's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, DEER's net profit margin of 16.70% significantly outperformed against the industry.
  • DEER's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.57, which clearly demonstrates the ability to cover short-term cash needs.
  • The revenue growth greatly exceeded the industry average of 12.5%. Since the same quarter one year prior, revenues rose by 45.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

Deer Consumer Products, Inc., through its subsidiaries, engages in the design, manufacture, and sale of small home and kitchen electronic appliances. The company has a P/E ratio of 9.6, equal to the average consumer durables industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Deer Consumer has a market cap of $305.7 million and is part of the consumer goods sector and consumer durables industry. Shares are down 19% year to date as of the close of trading on Wednesday.

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