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) -- TPC Group (Nasdaq: TPCG) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- Net operating cash flow has increased to $45.09 million or 24.71% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 11.66%.
- Compared to its closing price of one year ago, TPCG's share price has jumped by 134.47%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- TPC GROUP INC's earnings per share declined by 20.7% in the most recent quarter compared to the same quarter a year ago. 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, TPC GROUP INC increased its bottom line by earning $2.22 versus $1.69 in the prior year. This year, the market expects an improvement in earnings ($2.23 versus $2.22).
- The revenue fell significantly faster than the industry average of 0.3%. Since the same quarter one year prior, revenues fell by 38.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for TPC GROUP INC is rather low; currently it is at 15.40%. Regardless of TPCG's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.40% trails the industry average.
-- Written by a member of TheStreet Ratings Staff