Northeast Bancorp Stock Upgraded (NBN)

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) -- Northeast Bancorp (Nasdaq: NBN) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, good cash flow from operations, expanding profit margins and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

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Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 0.5%. Since the same quarter one year prior, revenues rose by 33.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 262.7% when compared to the same quarter one year prior, rising from $0.42 million to $1.52 million.
  • Net operating cash flow has significantly increased by 1047.34% to $5.88 million when compared to the same quarter last year. In addition, NORTHEAST BANCORP/ME has also vastly surpassed the industry average cash flow growth rate of 76.35%.
  • The gross profit margin for NORTHEAST BANCORP/ME is currently very high, coming in at 84.40%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 12.35% trails the industry average.
  • NORTHEAST BANCORP/ME has improved earnings per share by 33.3% 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, NORTHEAST BANCORP/ME reported lower earnings of $0.05 versus $3.98 in the prior year. This year, the market expects an improvement in earnings ($0.71 versus $0.05).
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Northeast Bancorp operates as the bank holding company for Northeast Bank that provides a range of banking and financial services to individuals and businesses in the United States. Its deposit products include demand deposit, NOW, money market, savings, and certificate of deposit accounts. The company has a P/E ratio of 20.9, above the S&P 500 P/E ratio of 17.7. Northeast has a market cap of $92.9 million and is part of the financial sector and banking industry. Shares are up 7.3% year to date as of the close of trading on Tuesday.

You can view the full Northeast 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.

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