Kaiser Aluminum Corporation Stock Upgraded (KALU)

NEW YORK ( TheStreet) -- Kaiser Aluminum Corporation (Nasdaq: KALU) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 2.8%. Since the same quarter one year prior, revenues rose by 19.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • KALU's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.00, which illustrates the ability to avoid short-term cash problems.
  • KAISER ALUMINUM CORP 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 year. We feel that this trend should continue. During the past fiscal year, KAISER ALUMINUM CORP increased its bottom line by earning $1.40 versus $0.72 in the prior year. This year, the market expects an improvement in earnings ($2.30 versus $1.40).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 2233.3% when compared to the same quarter one year prior, rising from -$0.30 million to $6.40 million.
  • 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 Metals & Mining industry and the overall market on the basis of return on equity, KAISER ALUMINUM CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
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Kaiser Aluminum Corporation produces and sells semi-fabricated specialty aluminum products primarily in the United States and Canada. The company has a P/E ratio of 47.8, above the average metals & mining industry P/E ratio of 47.3 and above the S&P 500 P/E ratio of 17.7. Kaiser Aluminum has a market cap of $949.5 million and is part of the basic materials sector and metals & mining industry. Shares are up 6.9% year to date as of the close of trading on Thursday.

You can view the full Kaiser Aluminum Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet RatingsStaff
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