Nevsun Resources Ltd. Stock Upgraded (NSU)

Editor's Note: 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

NEW YORK ( TheStreet) -- Nevsun Resources (AMEX: NSU) 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, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 13.6%. Since the same quarter one year prior, revenues slightly increased by 8.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • NSU has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.86, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, NEVSUN RESOURCES LTD's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for NEVSUN RESOURCES LTD is currently very high, coming in at 79.50%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 26.80% significantly outperformed against the industry average.

Nevsun Resources Ltd., a gold and base metal developer, together with its subsidiaries, engages in the exploration, development, extraction, processing, and reclamation of mineral properties in Africa. It produces gold, copper, silver, and zinc concentrates. The company has a P/E ratio of 4.5, equal to the average metals & mining industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Nevsun has a market cap of $802.1 million and is part of the basic materials sector and metals & mining industry. Shares are down 27.8% year to date as of the close of trading on Wednesday.

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

-- Written by a member of TheStreet Ratings Staff

Editor's Note: 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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