NEW YORK ( TheStreet) -- Value Line (Nasdaq: VALU) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Media industry and the overall market, VALUE LINE INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • VALU has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Despite the fact that VALU's debt-to-equity ratio is low, the quick ratio, which is currently 0.62, displays a potential problem in covering short-term cash needs.
  • VALUE LINE INC's earnings per share declined by 8.7% in the most recent quarter compared to 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, VALUE LINE INC turned its bottom line around by earning $3.79 versus -$2.31 in the prior year.
  • Net operating cash flow has significantly decreased to -$0.53 million or 115.62% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Media industry. The net income has decreased by 10.4% when compared to the same quarter one year ago, dropping from $2.32 million to $2.08 million.

Value Line, Inc. engages in the production of investment related periodical publications and provision of investment management services primarily in the United States. It operates in two segments, Investment Periodicals, Related Publications and Copyright Data; and Investment Management. The company has a P/E ratio of 3.4, equal to the average financial services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Value Line has a market cap of $128.4 million and is part of the financial sector and financial services industry. Shares are down 7.5% year to date as of the close of trading on Friday.

You can view the full Value Line Ratings Report or get investment ideas from our investment research center.
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