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) -- Medical Action Industries (Nasdaq: MDCI) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
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- The revenue growth came in higher than the industry average of 25.1%. Since the same quarter one year prior, revenues slightly increased by 0.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 103.4% when compared to the same quarter one year prior, rising from -$55.50 million to $1.90 million.
- MEDICAL ACTION INDUSTRIES 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, MEDICAL ACTION INDUSTRIES reported poor results of -$3.36 versus -$0.01 in the prior year. This year, the market expects an improvement in earnings ($0.20 versus -$3.36).
- Powered by its strong earnings growth of 103.53% and other important driving factors, this stock has surged by 75.84% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- The gross profit margin for MEDICAL ACTION INDUSTRIES is rather low; currently it is at 18.36%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.72% significantly trails the industry average.