NEW YORK ( TheStreet) -- Hampden Bancorp (Nasdaq: HBNK) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, reasonable valuation levels, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • HAMPDEN BANCORP INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HAMPDEN BANCORP INC turned its bottom line around by earning $0.20 versus -$0.04 in the prior year. This year, the market expects an improvement in earnings ($0.28 versus $0.20).
  • The gross profit margin for HAMPDEN BANCORP INC is currently very high, coming in at 73.30%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.60% trails the industry average.
  • Despite the weak revenue results, HBNK has outperformed against the industry average of 17.9%. Since the same quarter one year prior, revenues slightly dropped by 5.9%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

Hampden Bancorp, Inc. operates as the holding company for Hampden Bank that provides banking products and services to individuals, families, and businesses in Hampden county, Massachusetts. The company has a P/E ratio of 61.4, equal to the average banking industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Hampden has a market cap of $87.3 million and is part of the financial sector and banking industry. Shares are up 10.8% year to date as of the close of trading on Tuesday.

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

If you liked this article you might like

Insider Trading Alert - HBNK, ESSA And BCOV Traded By Insiders

Cash Dividend On The Way From Hampden Bancorp (HBNK)

10 Cheapest Bank Stocks to Forward Earnings (Update 3)

Hampden Bancorp Inc. Stock Upgraded (HBNK)

Hampden Bancorp Inc. Stock Upgraded (HBNK)

Hampden Bancorp Inc. Stock Downgraded (HBNK)

Hampden Bancorp Inc. Stock Downgraded (HBNK)