Seneca Foods Corp. Stock Upgraded (SENEA)

NEW YORK ( TheStreet) -- Seneca Foods (Nasdaq: SENEA) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, attractive valuation levels, good cash flow from operations, increase in stock price during the past year and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.

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 Food Products industry. The net income increased by 202.7% when compared to the same quarter one year prior, rising from -$7.98 million to $8.19 million.
  • Net operating cash flow has significantly increased by 86.54% to $58.58 million when compared to the same quarter last year. In addition, SENECA FOODS CORP has also vastly surpassed the industry average cash flow growth rate of 23.04%.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.
  • Despite the weak revenue results, SENEA has outperformed against the industry average of 23.4%. Since the same quarter one year prior, revenues fell by 10.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

Seneca Foods Corporation produces and distributes processed fruits and vegetables. The company has a P/E ratio of 11.1, below the average food & beverage industry P/E ratio of 27.2 and below the S&P 500 P/E ratio of 17.7. Seneca has a market cap of $240.4 million and is part of the consumer goods sector and food & beverage industry. Shares are down 5.2% year to date as of the close of trading on Tuesday.

You can view the full Seneca 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.