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) -- Pharmerica Corporation (NYSE: PMC) 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, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
- PHARMERICA CORP has improved earnings per share by 25.0% 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, PHARMERICA CORP increased its bottom line by earning $0.79 versus $0.63 in the prior year. This year, the market expects an improvement in earnings ($1.24 versus $0.79).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 25.0% when compared to the same quarter one year prior, going from $4.80 million to $6.00 million.
- The current debt-to-equity ratio, 0.56, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 2.55, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 328.33% to $51.40 million when compared to the same quarter last year. In addition, PHARMERICA CORP has also vastly surpassed the industry average cash flow growth rate of -82.55%.
-- Written by a member of TheStreet Ratings Staff