NEW YORK ( TheStreet) -- Globe Specialty Metals (Nasdaq: GSM) has been upgraded by TheStreet Ratings from hold to buy. 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, impressive record of earnings per share growth, compelling growth in net income and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- Powered by its strong earnings growth of 2900.00% and other important driving factors, this stock has surged by 98.62% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- 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 4433.5% when compared to the same quarter one year prior, rising from $0.52 million to $23.39 million.
- GLOBE SPECIALTY METALS 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, GLOBE SPECIALTY METALS INC increased its bottom line by earning $0.47 versus $0.02 in the prior year. This year, the market expects an improvement in earnings ($0.82 versus $0.47).
- GSM's debt-to-equity ratio is very low at 0.10 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GSM has a quick ratio of 2.41, which demonstrates the ability of the company to cover short-term liquidity needs.
- GSM's very impressive revenue growth is slightly higher than the industry average of 48.4%. Since the same quarter one year prior, revenues leaped by 53.6%. Growth in the company's revenue appears to have helped boost the earnings per share.