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) -- Intervest Bancshares Corporation (Nasdaq: IBCA) 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, growth in earnings per share, expanding profit margins, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 54.71% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, IBCA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- INTERVEST BANCSHARES CORP has improved earnings per share by 7.7% 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, INTERVEST BANCSHARES CORP increased its bottom line by earning $0.48 versus $0.45 in the prior year.
- The gross profit margin for INTERVEST BANCSHARES CORP is rather high; currently it is at 60.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.41% is above that of the industry average.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Commercial Banks industry average. The net income increased by 12.6% when compared to the same quarter one year prior, going from $3.13 million to $3.53 million.
- IBCA, with its decline in revenue, underperformed when compared the industry average of 0.7%. Since the same quarter one year prior, revenues fell by 12.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
-- Written by a member of TheStreet Ratings Staff