NEW YORK ( TheStreet) -- Spectrum Brands Holdings (NYSE: SPB) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated. Highlights from the ratings report include:
- Powered by its strong earnings growth of 164.10% and other important driving factors, this stock has surged by 26.34% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SPB should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- SPECTRUM BRANDS HOLDINGS 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 year. We feel that this trend should continue. During the past fiscal year, SPECTRUM BRANDS HOLDINGS INC continued to lose money by earning -$1.47 versus -$5.56 in the prior year. This year, the market expects an improvement in earnings ($2.53 versus -$1.47).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Products industry. The net income increased by 166.2% when compared to the same quarter one year prior, rising from -$19.76 million to $13.07 million.
- 36.80% is the gross profit margin for SPECTRUM BRANDS HOLDINGS INC which we consider to be strong. Regardless of SPB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.50% trails the industry average.
- SPB, with its decline in revenue, slightly underperformed the industry average of 0.9%. Since the same quarter one year prior, revenues slightly dropped by 1.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
-- Written by a member of TheStreet RatingsStaff