NEW YORK ( TheStreet) -- Simpson Manufacturing (NYSE: SSD) 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, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
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- SSD's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.28, which clearly demonstrates the ability to cover short-term cash needs.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- 46.89% is the gross profit margin for SIMPSON MANUFACTURING INC which we consider to be strong. Regardless of SSD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SSD's net profit margin of 3.10% compares favorably to the industry average.
- SSD, with its decline in revenue, slightly underperformed the industry average of 3.7%. Since the same quarter one year prior, revenues slightly dropped by 2.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Building Products industry and the overall market, SIMPSON MANUFACTURING INC's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.