NEW YORK ( TheStreet) -- Sanderson Farms (Nasdaq: SAFM) 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, solid stock price performance, increase in net income, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 24.6%. Since the same quarter one year prior, revenues rose by 24.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 246.6% when compared to the same quarter one year prior, rising from -$16.28 million to $23.87 million.
- Net operating cash flow has significantly increased by 288.09% to $130.30 million when compared to the same quarter last year. In addition, SANDERSON FARMS INC has also vastly surpassed the industry average cash flow growth rate of -2638.68%.
- SANDERSON FARMS INC reported significant earnings per share improvement 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, SANDERSON FARMS INC swung to a loss, reporting -$5.74 versus $6.00 in the prior year. This year, the market expects an improvement in earnings ($3.66 versus -$5.74).
-- Written by a member of TheStreet Ratings Staff