Rocky Brands Inc. Stock Upgraded (RCKY)

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) -- Rocky Brands (Nasdaq: RCKY) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, attractive valuation levels, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

ACTIVE STOCK TRADERS: Get full access to Jim Cramer's thoughts for less than $3/week - sometimes before he says them on TV! Start with a 14-Day Free Trial.

Highlights from the ratings report include:

The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry average. The net income increased by 3.0% when compared to the same quarter one year prior, going from $5.21 million to $5.37 million.
Despite its growing revenue, the company underperformed as compared with the industry average of 10.0%. Since the same quarter one year prior, revenues slightly increased by 2.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
ROCKY BRANDS INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ROCKY BRANDS INC increased its bottom line by earning $1.11 versus $1.02 in the prior year. This year, the market expects an improvement in earnings ($1.40 versus $1.11).
Despite currently having a low debt-to-equity ratio of 0.34, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.19 is very high and demonstrates very strong liquidity.

Rocky Brands, Inc., together with its subsidiaries, designs, manufactures, and markets footwear and apparel under the Rocky, Georgia Boot, Durango, Lehigh, Mossy Oak, and Michelin brand names. The company has a P/E ratio of 13.8, below the average consumer non-durables industry P/E ratio of 13.9 and below the S&P 500 P/E ratio of 17.7. Rocky has a market cap of $90.9 million and is part of the consumer goods sector and consumer non-durables industry. Shares are up 34.4% year to date as of the close of trading on Friday.

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

-- Written by a member of TheStreet Ratings Staff

FREE from Real Money's Jim Cramer: Winners and Losers Election 2012 - Steps to take NOW so you can profit no matter who is in charge! Free download now.