NEW YORK ( TheStreet) -- WSI Industries (Nasdaq: WSCI) 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, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- WSCI's revenue growth has slightly outpaced the industry average of 36.3%. Since the same quarter one year prior, revenues rose by 40.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, WSCI has a quick ratio of 1.75, which demonstrates the ability of the company to cover short-term liquidity needs.
- Powered by its strong earnings growth of 133.33% and other important driving factors, this stock has surged by 43.82% 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, WSCI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- 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 151.3% when compared to the same quarter one year prior, rising from $0.16 million to $0.40 million.
- Net operating cash flow has significantly increased by 848.36% to $1.15 million when compared to the same quarter last year. In addition, WSI INDUSTRIES INC has also vastly surpassed the industry average cash flow growth rate of 87.54%.