NEW YORK ( TheStreet) -- Arden Group (Nasdaq: ARDNA) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins, increase in net income, growth in earnings per share and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow. Highlights from the ratings report include:
- ARDEN GROUP INC has improved earnings per share by 11.2% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, ARDEN GROUP INC reported lower earnings of $5.72 versus $6.84 in the prior year.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 1.5%. Since the same quarter one year prior, revenues slightly dropped by 0.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the Food & Staples Retailing industry average, but is less than that of the S&P 500. The net income increased by 11.7% when compared to the same quarter one year prior, going from $5.07 million to $5.67 million.
- 39.90% is the gross profit margin for ARDEN GROUP INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 5.40% is above that of the industry average.
- ARDNA's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ARDNA has a quick ratio of 2.08, which demonstrates the ability of the company to cover short-term liquidity needs.