NEW YORK ( TheStreet) -- Deltic Timber Corporation (NYSE: DEL) 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 and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- Compared to its closing price of one year ago, DEL's share price has jumped by 32.98%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- DEL's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that DEL's debt-to-equity ratio is low, the quick ratio, which is currently 0.61, displays a potential problem in covering short-term cash needs.
- DELTIC TIMBER CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, DELTIC TIMBER CORP increased its bottom line by earning $0.99 versus $0.31 in the prior year.
- DEL, with its decline in revenue, underperformed when compared the industry average of 3.7%. Since the same quarter one year prior, revenues fell by 17.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Net operating cash flow has declined marginally to $9.49 million or 1.46% when compared to the same quarter last year. Despite a decrease in cash flow DELTIC TIMBER CORP is still fairing well by exceeding its industry average cash flow growth rate of -14.15%.