NEW YORK ( TheStreet) -- Atlantic Tele-Network (Nasdaq: ATNI) 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, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 78.1% when compared to the same quarter one year prior, rising from $6.37 million to $11.34 million.
- The debt-to-equity ratio is somewhat low, currently at 1.00, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- Net operating cash flow has slightly increased to $41.71 million or 5.30% when compared to the same quarter last year. In addition, ATLANTIC TELE-NETWORK INC has also modestly surpassed the industry average cash flow growth rate of 1.13%.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
- ATLANTIC TELE-NETWORK INC reported significant earnings per share improvement 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ATLANTIC TELE-NETWORK INC increased its bottom line by earning $2.48 versus $2.32 in the prior year. For the next year, the market is expecting a contraction of 43.1% in earnings ($1.41 versus $2.48).