NEW YORK ( TheStreet) -- Tredegar Corporation (NYSE: TG) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- TREDEGAR CORP has improved earnings per share by 26.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, TREDEGAR CORP turned its bottom line around by earning $0.83 versus -$0.05 in the prior year. This year, the market expects an improvement in earnings ($0.98 versus $0.83).
- 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 15.0% when compared to the same quarter one year prior, going from $4.96 million to $5.70 million.
- TG's revenue growth trails the industry average of 32.5%. Since the same quarter one year prior, revenues slightly increased by 8.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- TG's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, TG has a quick ratio of 2.19, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $25.46 million or 48.02% when compared to the same quarter last year. In addition, TREDEGAR CORP has also vastly surpassed the industry average cash flow growth rate of -51.67%.