Feihe International Inc. Stock Upgraded (ADY)

NEW YORK ( TheStreet) -- Feihe International (NYSE: ADY) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally poor debt management and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 24.4%. Since the same quarter one year prior, revenues rose by 22.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • FEIHE INTERNATIONAL INC has improved earnings per share by 10.0% 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, FEIHE INTERNATIONAL INC swung to a loss, reporting -$0.20 versus $0.89 in the prior year. This year, the market expects an improvement in earnings ($0.81 versus -$0.20).
  • Despite currently having a low debt-to-equity ratio of 0.53, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.23 is very low and demonstrates very weak liquidity.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Food Products industry. The net income has significantly decreased by 86.8% when compared to the same quarter one year ago, falling from $3.58 million to $0.47 million.
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Feihe International, Inc. engages in the production and distribution of infant formula, milk powder and soybean, rice, and walnut products in the People's Republic of China. The company has a P/E ratio of 9.3, above the average food & beverage industry P/E ratio of 4.2 and below the S&P 500 P/E ratio of 17.7. Feihe International has a market cap of $49.4 million and is part of the consumer goods sector and food & beverage industry. Shares are up 24.7% year to date as of the close of trading on Monday.

You can view the full Feihe International Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet RatingsStaff
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