NEW YORK ( TheStreet) -- Haynes International (Nasdaq: HAYN) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow. Highlights from the ratings report include:
- Powered by its strong earnings growth of 537.50% and other important driving factors, this stock has surged by 122.80% 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.
- HAYN's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, HAYN has a quick ratio of 1.70, which demonstrates the ability of the company to cover short-term liquidity needs.
- Despite its growing revenue, the company underperformed as compared with the industry average of 49.5%. Since the same quarter one year prior, revenues rose by 47.0%. 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 550.2% when compared to the same quarter one year prior, rising from $0.96 million to $6.22 million.
- HAYNES INTERNATIONAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, HAYNES INTERNATIONAL INC turned its bottom line around by earning $0.72 versus -$4.36 in the prior year. This year, the market expects an improvement in earnings ($2.36 versus $0.72).