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) -- Delta Apparel (AMEX: DLA) has been upgraded by TheStreet Ratings from hold to buy. Among the primary strengths of the company is its solid stock performance, considering both the consistency and magnitude of the price movement over time. We feel these strengths outweigh the fact that the company shows low profit margins.
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- 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.
- DELTA APPAREL INC's earnings per share declined by 12.7% 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, DELTA APPAREL INC turned its bottom line around by earning $1.09 versus -$0.34 in the prior year. This year, the market expects an improvement in earnings ($1.77 versus $1.09).
- DLA, with its decline in revenue, slightly underperformed the industry average of 5.0%. Since the same quarter one year prior, revenues slightly dropped by 1.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The gross profit margin for DELTA APPAREL INC is rather low; currently it is at 21.33%. It has decreased from the same quarter the previous year.