NEW YORK ( TheStreet) -- Valpey Fisher Corporation (Nasdaq: VPF) 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, revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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 Electrical Equipment industry. The net income increased by 39.4% when compared to the same quarter one year prior, rising from $0.14 million to $0.19 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 3.8%. Since the same quarter one year prior, revenues slightly increased by 2.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • VPF has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.68, which clearly demonstrates the ability to cover short-term cash needs.
  • VALPEY-FISHER CORP has improved earnings per share by 33.3% 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. During the past fiscal year, VALPEY-FISHER CORP turned its bottom line around by earning $0.14 versus -$0.04 in the prior year.
  • 42.20% is the gross profit margin for VALPEY-FISHER CORP which we consider to be strong. 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 4.90% trails the industry average.

Valpey-Fisher Corporation, together with its subsidiaries, engages in the design, production, import, and sale of frequency control devices and ultrasonic transducer devices primarily in Mexico, Canada, the Asia Pacific, Europe, and the Middle East. The company has a P/E ratio of 29.1, equal to the average electronics industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Valpey Fisher has a market cap of $17.7 million and is part of the technology sector and electronics industry. Shares are up 20.6% year to date as of the close of trading on Tuesday.

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