NEW YORK ( TheStreet) -- Sauer-Danfoss (NYSE: SHS) 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, impressive record of earnings per share growth, compelling growth in net income, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook. Highlights from the ratings report include:
- The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.13, which illustrates the ability to avoid short-term cash problems.
- Despite its growing revenue, the company underperformed as compared with the industry average of 37.8%. Since the same quarter one year prior, revenues rose by 30.3%. 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 Machinery industry. The net income increased by 116.7% when compared to the same quarter one year prior, rising from $34.56 million to $74.88 million.
- SAUER-DANFOSS 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 two years. During the past fiscal year, SAUER-DANFOSS INC turned its bottom line around by earning $4.40 versus -$7.15 in the prior year.
- Powered by its strong earnings growth of 116.90% and other important driving factors, this stock has surged by 177.13% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SHS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.