NEW YORK ( TheStreet) -- U S GLOBAL INVESTORS INC (Nasdaq: GROW) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity 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:
- GROW 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 6.94, which clearly demonstrates the ability to cover short-term cash needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Capital Markets industry and the overall market, U S GLOBAL INVESTORS INC's return on equity exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has increased to $1.80 million or 40.54% when compared to the same quarter last year. Despite an increase in cash flow of 40.54%, U S GLOBAL INVESTORS INC is still growing at a significantly lower rate than the industry average of 110.14%.
- Despite the weak revenue results, GROW has outperformed against the industry average of 38.4%. Since the same quarter one year prior, revenues fell by 12.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- U S GLOBAL INVESTORS INC's earnings per share declined by 37.5% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, U S GLOBAL INVESTORS INC increased its bottom line by earning $0.51 versus $0.35 in the prior year.