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) -- Pilgrims Pride (Nasdaq: PPC) 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, compelling growth in net income, revenue growth and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins.
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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 41.02% 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, PPC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- PILGRIM'S PRIDE CORP has improved earnings per share by 16.7% 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. We feel that this trend should continue. During the past fiscal year, PILGRIM'S PRIDE CORP turned its bottom line around by earning $0.71 versus -$2.32 in the prior year. This year, the market expects an improvement in earnings ($1.22 versus $0.71).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Food Products industry average. The net income increased by 39.3% when compared to the same quarter one year prior, rising from $39.17 million to $54.58 million.
- The revenue growth significantly trails the industry average of 42.5%. Since the same quarter one year prior, revenues slightly increased by 7.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
-- Written by a member of TheStreet Ratings Staff