NEW YORK ( TheStreet) -- A.H. Belo Corporation (NYSE: AHC) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 102.3% when compared to the same quarter one year prior, rising from -$119.51 million to $2.75 million.
- AHC 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. To add to this, AHC has a quick ratio of 1.53, which demonstrates the ability of the company to cover short-term liquidity needs.
- A. H. BELO 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. During the past fiscal year, A. H. BELO CORP continued to lose money by earning -$0.52 versus -$5.90 in the prior year.
- The gross profit margin for A. H. BELO CORP is rather low; currently it is at 16.60%. Regardless of AHC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.20% trails the industry average.
- AHC's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 38.87%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
-- Written by a member of TheStreet RatingsStaff