Sifco Industries Inc. Stock Upgraded (SIF)

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) -- Sifco Industries (AMEX: SIF) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

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Highlights from the ratings report include:
  • SIF's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.45, which illustrates the ability to avoid short-term cash problems.
  • SIF, with its decline in revenue, slightly underperformed the industry average of 4.6%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • SIF has underperformed the S&P 500 Index, declining 8.91% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • SIFCO INDUSTRIES reported flat earnings per share in the most recent quarter. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, SIFCO INDUSTRIES reported lower earnings of $1.11 versus $1.41 in the prior year.
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SIFCO Industries, Inc. engages in the production and sale of various metalworking processes, services, and products. It operates in three segments: Forged Components Group, Turbine Component Services and Repair Group, and Applied Surface Concepts Group. The company has a P/E ratio of 13.7, below the S&P 500 P/E ratio of 17.7. Sifco has a market cap of $90 million and is part of the industrial goods sector and industrial industry. Shares are up 7% year to date as of the close of trading on Tuesday.

You can view the full Sifco 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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