Owens-Illinois Inc Stock Upgraded (OI)

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) -- Owens-Illinois (NYSE: OI) has been upgraded by TheStreet Ratings from sell to hold. Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including generally higher debt management risk, disappointing return on equity and poor profit margins.

  • 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.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $223.00 million or 19.89% when compared to the same quarter last year. In addition, OWENS-ILLINOIS INC has also modestly surpassed the industry average cash flow growth rate of 18.91%.
  • OI, with its decline in revenue, slightly underperformed the industry average of 1.2%. Since the same quarter one year prior, revenues slightly dropped by 6.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • OWENS-ILLINOIS INC's earnings per share declined by 23.6% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, OWENS-ILLINOIS INC swung to a loss, reporting -$3.07 versus $1.53 in the prior year. This year, the market expects an improvement in earnings ($2.60 versus -$3.07).
  • The debt-to-equity ratio is very high at 3.03 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, OI maintains a poor quick ratio of 0.72, which illustrates the inability to avoid short-term cash problems.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Containers & Packaging industry and the overall market, OWENS-ILLINOIS INC's return on equity significantly trails that of both the industry average and the S&P 500.
.

Owens-Illinois, Inc., through its subsidiaries, manufactures and sells glass container products primarily in Europe, North America, South America, and the Asia Pacific. Owens-Illinois has a market cap of $3.76 billion and is part of the consumer goods sector and consumer non-durables industry. Shares are up 7.5% year to date as of the close of trading on Thursday.

You can view the full Owens-Illinois 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.

It's Official: Action Alerts PLUS beats the S&P 500 with Dividends Reinvested! Cramer and Link were up 16.72% in 2012. Were you? See what they are trading for 14-days FREE.
null

If you liked this article you might like

This Stock Market Phenomenon Could Trigger Trading Hell on Monday: Market Recon

Charter Says No to Sprint - 5 Things You Must Know Before the Market Opens

5 Things You Must Know Before the Market Opens Monday

Market Recon: The World Is Agog With 'Risk-on' Behavior