NEW YORK ( TheStreet) -- Longwei Petroleum Investment Holding Limite (AMEX: LPH) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • LONGWEI PETROLEUM INVT HLDG 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 two years. During the past fiscal year, LONGWEI PETROLEUM INVT HLDG increased its bottom line by earning $0.60 versus $0.36 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 Oil, Gas & Consumable Fuels industry. The net income increased by 264.8% when compared to the same quarter one year prior, rising from $4.89 million to $17.85 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, LONGWEI PETROLEUM INVT HLDG has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • The gross profit margin for LONGWEI PETROLEUM INVT HLDG is rather low; currently it is at 19.00%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 15.00% is above that of the industry average.
  • Net operating cash flow has significantly decreased to -$6.63 million or 298.91% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Longwei Petroleum Investment Holding Limited, an energy company, engages in the wholesale distribution of finished petroleum products in the People's Republic of China. The company has a P/E ratio of 1.9, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Longwei Petroleum Investment Holding Limite has a market cap of $139.1 million and is part of the basic materials sector and energy industry. Shares are down 43.2% year to date as of the close of trading on Friday.

You can view the full Longwei Petroleum Investment Holding Limite Ratings Report or get investment ideas from our investment research center.

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