NEW YORK ( TheStreet) -- Retail Opportunity Investments Corp (Nasdaq: ROIC) 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, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- ROIC's very impressive revenue growth greatly exceeded the industry average of 14.7%. Since the same quarter one year prior, revenues leaped by 282.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- ROIC's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- RETAIL OPPORTUNITY INVTS CP 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, RETAIL OPPORTUNITY INVTS CP continued to lose money by earning -$0.01 versus -$0.20 in the prior year. This year, the market expects an improvement in earnings ($0.12 versus -$0.01).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 164.0% when compared to the same quarter one year prior, rising from -$1.09 million to $0.70 million.