Cameron International Corporation Stock Buy Recommendation Reiterated (CAM)

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) -- Cameron International Corporation (NYSE: CAM) has been reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 4.1%. Since the same quarter one year prior, revenues rose by 19.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.16, which illustrates the ability to avoid short-term cash problems.
  • CAMERON INTERNATIONAL CORP 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, CAMERON INTERNATIONAL CORP increased its bottom line by earning $3.02 versus $2.09 in the prior year. This year, the market expects an improvement in earnings ($3.86 versus $3.02).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 118.7% when compared to the same quarter one year prior, rising from $99.80 million to $218.30 million.
  • Net operating cash flow has significantly increased by 65.51% to $544.70 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 16.82%.

Cameron International Corporation provides flow equipment products, systems, and services worldwide. Cameron International has a market cap of $15.82 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 20.5, above the S&P 500 P/E ratio of 17.7. Shares are up 13.5% year to date as of the close of trading on Wednesday.

You can view the full Cameron International Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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