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) -- Walter Investment Management (AMEX: WAC) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and impressive record of earnings per share growth. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.
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- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Capital Markets industry average. The net income increased by 109.8% when compared to the same quarter one year prior, rising from -$65.46 million to $6.41 million.
- WAC's revenue growth trails the industry average of 26.8%. Since the same quarter one year prior, revenues slightly increased by 5.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- WALTER INVESTMENT MGMT CORP reported significant earnings per share improvement 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, WALTER INVESTMENT MGMT CORP swung to a loss, reporting -$2.44 versus $1.38 in the prior year. This year, the market expects an improvement in earnings ($2.79 versus -$2.44).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, WALTER INVESTMENT MGMT CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- Net operating cash flow has significantly decreased to -$2.66 million or 104.02% when compared to the same quarter last year. Despite a decrease in cash flow of 104.02%, WALTER INVESTMENT MGMT CORP is still significantly exceeding the industry average of -308.25%.
-- Written by a member of TheStreet Ratings Staff