Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Harsco Corporation (NYSE: HSC) 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 stock price during the past year, increase in net income, growth in earnings per share and good cash flow from operations. 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 Machinery industry. The net income increased by 87.2% when compared to the same quarter one year prior, rising from $12.71 million to $23.80 million.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
- HARSCO CORP 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, HARSCO CORP reported poor results of -$3.15 versus -$0.12 in the prior year. This year, the market expects an improvement in earnings ($1.19 versus -$3.15).
- Net operating cash flow has increased to $52.95 million or 42.45% when compared to the same quarter last year. Despite an increase in cash flow, HARSCO CORP's cash flow growth rate is still lower than the industry average growth rate of 58.64%.
- Despite the weak revenue results, HSC has outperformed against the industry average of 16.1%. Since the same quarter one year prior, revenues slightly dropped by 1.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.