NEW YORK ( TheStreet) -- Bachoco Industries (NYSE: IBA) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Food Products industry and the overall market on the basis of return on equity, INDUSTRIAS BACHOCO SAB DE CV has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- IBA's debt-to-equity ratio is very low at 0.04 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 3.22, which clearly demonstrates the ability to cover short-term cash needs.
- The revenue growth significantly trails the industry average of 135.8%. Since the same quarter one year prior, revenues slightly increased by 5.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, IBA's share price has jumped by 28.87%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, IBA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.