NEW YORK ( TheStreet) -- WSI Industries (Nasdaq: WSCI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, robust revenue growth, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- WSI INDUSTRIES INC 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 two years. During the past fiscal year, WSI INDUSTRIES INC increased its bottom line by earning $0.32 versus $0.23 in the prior year.
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Machinery industry average. The net income increased by 44.9% when compared to the same quarter one year prior, rising from $0.12 million to $0.17 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 27.9%. Since the same quarter one year prior, revenues rose by 23.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels.
-- Written by a member of TheStreet RatingsStaff