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) -- HMN Financial (Nasdaq: HMNF) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, attractive valuation levels, expanding profit margins and notable return on equity. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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- Powered by its strong earnings growth of 112.01% and other important driving factors, this stock has surged by 167.72% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HMNF should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- HMN FINANCIAL INC 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. During the past fiscal year, HMN FINANCIAL INC turned its bottom line around by earning $0.85 versus -$3.46 in the prior year.
- The gross profit margin for HMN FINANCIAL INC is currently very high, coming in at 83.90%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 15.77% trails the industry average.
- HMNF, with its decline in revenue, underperformed when compared the industry average of 6.9%. Since the same quarter one year prior, revenues fell by 15.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
-- Written by a member of TheStreet Ratings Staff