NEW YORK ( TheStreet) -- Lakeland Industries (Nasdaq: LAKE) 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, reasonable valuation levels, good cash flow from operations, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- Although LAKE's debt-to-equity ratio of 0.25 is very low, it is currently higher than that of the industry average. To add to this, LAKE has a quick ratio of 2.15, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 262.66% to $2.23 million when compared to the same quarter last year. In addition, LAKELAND INDUSTRIES INC has also vastly surpassed the industry average cash flow growth rate of -7.43%.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- LAKELAND INDUSTRIES INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, LAKELAND INDUSTRIES INC increased its bottom line by earning $0.23 versus $0.19 in the prior year. This year, the market expects an improvement in earnings ($0.44 versus $0.23).