North Valley Bancorp Stock Upgraded (NOVB)

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) -- North Valley Bancorp (Nasdaq: NOVB) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

  • 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.

Highlights from the ratings report include:
  • The gross profit margin for NORTH VALLEY BANCORP is currently very high, coming in at 96.54%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.68% trails the industry average.
  • Compared to its closing price of one year ago, NOVB's share price has jumped by 32.00%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • NOVB, with its decline in revenue, slightly underperformed the industry average of 2.5%. Since the same quarter one year prior, revenues fell by 11.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Commercial Banks industry and the overall market, NORTH VALLEY BANCORP's return on equity is below that of both the industry average and the S&P 500.
  • NORTH VALLEY BANCORP's earnings per share declined by 27.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NORTH VALLEY BANCORP increased its bottom line by earning $0.92 versus $0.45 in the prior year. For the next year, the market is expecting a contraction of 11.4% in earnings ($0.82 versus $0.92).

North Valley Bancorp operates as a bank holding company North Valley Bank that provides commercial and retail banking services to businesses and middle income individuals in California. North Valley has a market cap of $124.1 million and is part of the financial sector and banking industry. Shares are up 27.5% year to date as of the close of trading on Tuesday.

You can view the full North Valley Ratings Report or get investment ideas from our investment research center.

3x UPSIDE POTENTIAL: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more..

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

More from Markets

A Hungry Grizzly Bear Is Stalking the Stock Market

A Hungry Grizzly Bear Is Stalking the Stock Market

Tesla Has Lost 15% Since Musk's Take-Private Tweet

Tesla Has Lost 15% Since Musk's Take-Private Tweet

Why Most Americans Like a Volatile Stock Market: Study

Why Most Americans Like a Volatile Stock Market: Study

Should Retirees Invest in the Tech Sector?

Should Retirees Invest in the Tech Sector?

Here's How to Trade Walmart, Nordstrom, Macy's and J.C. Penney After Earnings

Here's How to Trade Walmart, Nordstrom, Macy's and J.C. Penney After Earnings