NEW YORK ( TheStreet) -- Carlisle Companies (NYSE: CSL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance 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:
- The net income growth from the same quarter one year ago has significantly exceeded that of the Industrial Conglomerates industry average, but is less than that of the S&P 500. The net income increased by 6.3% when compared to the same quarter one year prior, going from $50.50 million to $53.70 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 33.1%. Since the same quarter one year prior, revenues rose by 30.7%. 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, 0.35, 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 1.07, which illustrates the ability to avoid short-term cash problems.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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.
- Net operating cash flow has significantly increased by 151.07% to $105.20 million when compared to the same quarter last year. In addition, CARLISLE COS INC has also vastly surpassed the industry average cash flow growth rate of -51.26%.