NEW YORK ( TheStreet) -- Cavco Industries (Nasdaq: CVCO) 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, solid stock price performance, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow. Highlights from the ratings report include:
- CVCO's very impressive revenue growth greatly exceeded the industry average of 41.8%. Since the same quarter one year prior, revenues leaped by 189.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.60, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.02, which illustrates the ability to avoid short-term cash problems.
- This stock has managed to rise its share value by 20.84% over the past twelve months. 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.
- CAVCO INDUSTRIES INC has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, CAVCO INDUSTRIES INC turned its bottom line around by earning $0.41 versus -$0.52 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 Household Durables industry. The net income increased by 6887.5% when compared to the same quarter one year prior, rising from $0.02 million to $1.68 million.
-- Written by a member of TheStreet RatingsStaff