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) -- General Cable Corporation (NYSE: BGC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins.
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- GENERAL CABLE CORP/DE reported significant earnings per share improvement 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 two years. We feel that this trend should continue. During the past fiscal year, GENERAL CABLE CORP/DE increased its bottom line by earning $1.54 versus $1.30 in the prior year. This year, the market expects an improvement in earnings ($2.26 versus $1.54).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electrical Equipment industry. The net income increased by 751.4% when compared to the same quarter one year prior, rising from $3.70 million to $31.50 million.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.2%. Since the same quarter one year prior, revenues slightly dropped by 0.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for GENERAL CABLE CORP/DE is currently extremely low, coming in at 11.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.09% trails that of the industry average.
-- Written by a member of TheStreet Ratings Staff