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) -- Delhaize Group (NYSE: DEG) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food & Staples Retailing industry. The net income increased by 2054.4% when compared to the same quarter one year prior, rising from -$4.00 million to $78.18 million.
- The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels.
- Net operating cash flow has significantly increased by 50.64% to $417.80 million when compared to the same quarter last year. In addition, DELHAIZE GROUP - ETS DLHZ FR has also vastly surpassed the industry average cash flow growth rate of -8.13%.
- Powered by its strong earnings growth of 2600.00% and other important driving factors, this stock has surged by 65.08% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- DELHAIZE GROUP - ETS DLHZ FR reported significant earnings per share improvement 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, DELHAIZE GROUP - ETS DLHZ FR reported lower earnings of $1.77 versus $6.06 in the prior year. This year, the market expects an improvement in earnings ($5.71 versus $1.77).
-- Written by a member of TheStreet Ratings Staff