NEW YORK ( TheStreet) -- Village Super Market Incorporated (Nasdaq: VLGEA) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • VLGEA's revenue growth has slightly outpaced the industry average of 1.8%. Since the same quarter one year prior, revenues slightly increased by 0.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 92.29% to $18.88 million when compared to the same quarter last year. In addition, VILLAGE SUPER MARKET has also vastly surpassed the industry average cash flow growth rate of -20.20%.
  • VLGEA's debt-to-equity ratio is very low at 0.21 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.93 is somewhat weak and could be cause for future problems.
  • The change in net income from the same quarter one year ago has exceeded that of the Food & Staples Retailing industry average, but is less than that of the S&P 500. The net income has decreased by 1.5% when compared to the same quarter one year ago, dropping from $8.90 million to $8.76 million.
  • In its most recent trading session, VLGEA has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

Village Super Market, Inc., together with its subsidiaries, operates a chain of ShopRite supermarkets in the United States. The company has a P/E ratio of 17.7, above the average retail industry P/E ratio of 17.3 and equal to the S&P 500 P/E ratio of 17.7. Village Super Market has a market cap of $365 million and is part of the services sector and retail industry. Shares are down 10.8% year to date as of the close of trading on Monday.

You can view the full Village Super Market Ratings Report or get investment ideas from our investment research center.