NEW YORK ( TheStreet) -- Claude Resources (AMEX: CGR) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, robust revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow. Highlights from the ratings report include:
- CLAUDE RESOURCES INC has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, CLAUDE RESOURCES INC turned its bottom line around by earning $0.03 versus -$0.07 in the prior year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 1694.1% when compared to the same quarter one year prior, rising from $0.29 million to $5.19 million.
- The revenue growth significantly trails the industry average of 69.7%. Since the same quarter one year prior, revenues rose by 20.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CGR's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.32, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for CLAUDE RESOURCES INC is rather high; currently it is at 51.40%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 28.40% trails the industry average.