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) -- TMS International (NYSE: TMS) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
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- Powered by its strong earnings growth of 47.05% and other important driving factors, this stock has surged by 26.19% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- TMS INTERNATIONAL CORP has improved earnings per share by 47.0% 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. This trend suggests that the performance of the business is improving. During the past fiscal year, TMS INTERNATIONAL CORP increased its bottom line by earning $0.65 versus $0.26 in the prior year. This year, the market expects an improvement in earnings ($0.92 versus $0.65).
- TMS, with its decline in revenue, slightly underperformed the industry average of 13.0%. Since the same quarter one year prior, revenues fell by 18.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Commercial Services & Supplies industry and the overall market, TMS INTERNATIONAL CORP's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for TMS INTERNATIONAL CORP is currently extremely low, coming in at 9.10%. Regardless of TMS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.71% trails the industry average.
-- Written by a member of TheStreet Ratings Staff