NEW YORK ( TheStreet) -- Coffee Holding Company (Nasdaq: JVA) 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, increase in net income, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • JVA's very impressive revenue growth greatly exceeded the industry average of 24.6%. Since the same quarter one year prior, revenues leaped by 120.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • JVA's debt-to-equity ratio is very low at 0.08 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 1.47, which illustrates the ability to avoid short-term cash problems.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 51.6% when compared to the same quarter one year prior, rising from $1.04 million to $1.58 million.
  • Net operating cash flow has significantly increased by 80.90% to $3.59 million when compared to the same quarter last year. Despite an increase in cash flow, COFFEE HOLDING CO INC's cash flow growth rate is still lower than the industry average growth rate of 121.28%.
  • Powered by its strong earnings growth of 26.31% and other important driving factors, this stock has surged by 167.27% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

Coffee Holding Co., Inc. engages in manufacturing, roasting, packaging, marketing, and distributing roasted and blended coffees in the United States and Canada. The company offers products in three categories: wholesale green coffee, private label coffee, and branded coffee. The company has a P/E ratio of 69.8, above the average food & beverage industry P/E ratio of 16.9 and above the S&P 500 P/E ratio of 17.7. Coffee Holding has a market cap of $51 million and is part of the consumer goods sector and food & beverage industry. Shares are up 69.3% year to date as of the close of trading on Thursday.

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-- Written by a member of TheStreet RatingsStaff