NEW YORK ( TheStreet) -- China Cord Blood (NYSE: CO) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
- The revenue growth came in higher than the industry average of 13.7%. Since the same quarter one year prior, revenues rose by 36.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.65, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 4.71, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for CHINA CORD BLOOD CORP is currently very high, coming in at 79.77%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.35% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 55.35% to $25.18 million when compared to the same quarter last year. In addition, CHINA CORD BLOOD CORP has also vastly surpassed the industry average cash flow growth rate of -42.47%.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.