NEW YORK ( TheStreet) -- National Penn (Nasdaq: NPBC) 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, expanding profit margins, solid stock price performance and notable return on equity. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results. Highlights from the ratings report include:
- NATIONAL PENN BANCSHARES 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. We feel that this trend should continue. During the past fiscal year, NATIONAL PENN BANCSHARES INC increased its bottom line by earning $0.55 versus $0.11 in the prior year. This year, the market expects an improvement in earnings ($0.62 versus $0.55).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 34.7% when compared to the same quarter one year prior, rising from $18.78 million to $25.30 million.
- The gross profit margin for NATIONAL PENN BANCSHARES INC is currently very high, coming in at 81.50%. It has increased significantly from the same period last year. Along with this, the net profit margin of 23.90% significantly outperformed against the industry average.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- NPBC, with its decline in revenue, underperformed when compared the industry average of 3.1%. Since the same quarter one year prior, revenues slightly dropped by 6.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
-- Written by a member of TheStreet RatingsStaff