NEW YORK ( TheStreet) -- Circor International (NYSE: CIR) 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, robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- CIR's revenue growth trails the industry average of 30.8%. Since the same quarter one year prior, revenues rose by 18.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CIRCOR INTL INC has improved earnings per share by 5.0% 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 two years. We feel that this trend should continue. During the past fiscal year, CIRCOR INTL INC increased its bottom line by earning $0.71 versus $0.33 in the prior year. This year, the market expects an improvement in earnings ($2.07 versus $0.71).
- CIR's debt-to-equity ratio is very low at 0.27 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 0.95 is somewhat weak and could be cause for future problems.
- 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. In comparison to the other companies in the Machinery industry and the overall market, CIRCOR INTL INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Machinery industry average. The net income increased by 5.3% when compared to the same quarter one year prior, going from $10.40 million to $10.95 million.