NEW YORK ( TheStreet) -- Material Sciences Corporation (Nasdaq: MASC) 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, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Chemicals industry and the overall market on the basis of return on equity, MATERIAL SCIENCES CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- Net operating cash flow has significantly increased by 96.76% to $5.65 million when compared to the same quarter last year. In addition, MATERIAL SCIENCES CORP has also vastly surpassed the industry average cash flow growth rate of -98.14%.
- MASC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, MASC has a quick ratio of 2.15, which demonstrates the ability of the company to cover short-term liquidity needs.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 83.25% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MASC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.