NEW YORK ( TheStreet) -- StealthGas (Nasdaq: GASS) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we find that the company has not been very careful in the management of its balance sheet. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 383.6% when compared to the same quarter one year prior, rising from $1.53 million to $7.38 million.
- After a year of stock price fluctuations, the net result is that GASS's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, STEALTHGAS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The debt-to-equity ratio of 1.13 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, GASS maintains a poor quick ratio of 0.78, which illustrates the inability to avoid short-term cash problems.
-- Written by a member of TheStreet Ratings Staff