NEW YORK ( TheStreet) -- Global Sources (Nasdaq: GSOL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 19.7%. Since the same quarter one year prior, revenues rose by 14.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for GLOBAL SOURCES LTD is rather high; currently it is at 66.40%. It has increased significantly from the same period last year. Along with this, the net profit margin of 16.10% is above that of the industry average.
- GSOL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
- GLOBAL SOURCES LTD's earnings per share declined by 10.8% 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, GLOBAL SOURCES LTD increased its bottom line by earning $0.82 versus $0.65 in the prior year. This year, the market expects an improvement in earnings ($0.88 versus $0.82).
-- Written by a member of TheStreet RatingsStaff