NEW YORK ( TheStreet) -- BancorpSouth (NYSE: BXS) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- The gross profit margin for BANCORPSOUTH INC is currently very high, coming in at 78.90%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.80% trails the industry average.
- Net operating cash flow has slightly increased to $74.15 million or 6.46% when compared to the same quarter last year. Despite an increase in cash flow of 6.46%, BANCORPSOUTH INC is still growing at a significantly lower rate than the industry average of 91.31%.
- BANCORPSOUTH INC's earnings per share declined by 15.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BANCORPSOUTH INC increased its bottom line by earning $0.44 versus $0.27 in the prior year. This year, the market expects an improvement in earnings ($0.70 versus $0.44).
- BXS, with its decline in revenue, slightly underperformed the industry average of 3.2%. Since the same quarter one year prior, revenues fell by 10.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- 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 Commercial Banks industry and the overall market on the basis of return on equity, BANCORPSOUTH INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
-- Written by a member of TheStreet RatingsStaff