NEW YORK ( TheStreet) -- Gencor Industries (Nasdaq: GENC) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- GENC 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 10.20, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 359.80% to $2.60 million when compared to the same quarter last year. In addition, GENCOR INDUSTRIES INC has also vastly surpassed the industry average cash flow growth rate of -28.80%.
- Compared to its price level of one year ago, GENC is down 9.66% to its most recent closing price of 7.15. Looking ahead, our view is that this company's fundamentals will not have much impact either way, allowing the stock to generally move up or down based on the push and pull of the broad market.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Machinery industry. The net income has decreased by 20.8% when compared to the same quarter one year ago, dropping from $1.11 million to $0.88 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Machinery industry and the overall market, GENCOR INDUSTRIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
-- Written by a member of TheStreet RatingsStaff