NEW YORK ( TheStreet) -- Symmetry Medical (NYSE: SMA) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, SMA has underperformed the S&P 500 Index, declining 17.13% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Health Care Equipment & Supplies industry and the overall market, SYMMETRY MEDICAL INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- SYMMETRY MEDICAL INC's earnings per share declined by 7.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SYMMETRY MEDICAL INC reported lower earnings of $0.40 versus $0.61 in the prior year. This year, the market expects an improvement in earnings ($0.58 versus $0.40).
- Despite currently having a low debt-to-equity ratio of 0.30, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that SMA's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.54 is high and demonstrates strong liquidity.
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.9%. Since the same quarter one year prior, revenues slightly increased by 6.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.