Altra Holdings Incorporated Stock Upgraded (AIMC)

NEW YORK ( TheStreet) -- Altra Holdings Incorporated (Nasdaq: AIMC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels, good cash flow from operations, 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:
  • AIMC's revenue growth has slightly outpaced the industry average of 17.0%. Since the same quarter one year prior, revenues rose by 20.4%. 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.
  • Net operating cash flow has significantly increased by 69.01% to -$2.26 million when compared to the same quarter last year. In addition, ALTRA HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of -62.20%.
  • ALTRA HOLDINGS INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, ALTRA HOLDINGS INC increased its bottom line by earning $1.42 versus $0.93 in the prior year. This year, the market expects an improvement in earnings ($1.50 versus $1.42).
  • Even though the current debt-to-equity ratio is 1.16, it is still below the industry average, suggesting that this level of debt is acceptable within the Machinery industry. Despite the fact that AIMC's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.96 is high and demonstrates strong liquidity.

Altra Holdings, Inc., through its subsidiary, Altra Industrial Motion, Inc., designs, produces, and markets a range of mechanical power transmission and motion control products worldwide. The company has a P/E ratio of 10.8, equal to the average industrial industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Altra has a market cap of $407 million and is part of the industrial goods sector and industrial industry. Shares are down 18% year to date as of the close of trading on Thursday.

You can view the full Altra Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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