NEW YORK ( TheStreet) -- Transportadora de Gas del Sur (NYSE: TGS) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow. 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 Gas Utilities industry. The net income increased by 660.2% when compared to the same quarter one year prior, rising from $3.04 million to $23.10 million.
- TGS's revenue growth trails the industry average of 36.6%. Since the same quarter one year prior, revenues rose by 25.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.83, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, TGS has a quick ratio of 1.51, which demonstrates the ability of the company to cover short-term liquidity needs.
- 38.00% is the gross profit margin for TRANSPORTADORA DE GAS SUR which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 17.10% significantly outperformed against the industry average.
-- Written by a member of TheStreet RatingsStaff