Given Imaging Ltd. Stock Upgraded (GIVN)

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) -- Given Imaging (Nasdaq: GIVN) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

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Highlights from the ratings report include:
  • GIVEN IMAGING reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, GIVEN IMAGING increased its bottom line by earning $0.38 versus $0.28 in the prior year. This year, the market expects an improvement in earnings ($0.48 versus $0.38).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 58.7% when compared to the same quarter one year prior, rising from $1.92 million to $3.04 million.
  • GIVN's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.05, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has increased to $6.91 million or 35.31% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -1.58%.
  • The gross profit margin for GIVEN IMAGING is currently very high, coming in at 82.10%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, GIVN's net profit margin of 6.80% significantly trails the industry average.
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Given Imaging Ltd., together with its subsidiaries, develops, manufactures, and markets diagnostic products for the visualization and detection of gastrointestinal tract disorders. The company has a P/E ratio of 47.2, above the S&P 500 P/E ratio of 17.7. Given Imaging has a market cap of $569.4 million and is part of the health care sector and health services industry. Shares are up 5.6% year to date as of the close of trading on Monday.

You can view the full Given Imaging 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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