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) -- Coca-Cola Hellenic Bottling Company S.A (NYSE: CCH) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins 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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- COCA-COLA HELLENIC BOTTLING's earnings per share declined by 24.6% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, COCA-COLA HELLENIC BOTTLING reported lower earnings of $0.97 versus $1.53 in the prior year. This year, the market expects an improvement in earnings ($1.02 versus $0.97).
- CCH, with its decline in revenue, underperformed when compared the industry average of 2.1%. Since the same quarter one year prior, revenues fell by 16.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- CCH's debt-to-equity ratio of 0.78 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further.
- 42.20% is the gross profit margin for COCA-COLA HELLENIC BOTTLING which we consider to be strong. Regardless of CCH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CCH's net profit margin of 6.30% is significantly lower than the same period one year prior.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, the stock's 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 the other strengths this company displays justify these higher price levels.
-- Written by a member of TheStreet Ratings Staff