Spectrum Brands Holdings Inc Stock Upgraded (SPB)

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) -- Spectrum Brands Holdings (NYSE: SPB) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.2%. Since the same quarter one year prior, revenues rose by 26.5%. 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 Household Products industry. The net income increased by 504.0% when compared to the same quarter one year prior, rising from -$13.44 million to $54.29 million.
  • Net operating cash flow has increased to -$135.99 million or 27.20% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -16.23%.
  • 38.25% is the gross profit margin for SPECTRUM BRANDS HOLDINGS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 4.93% trails the industry average.
  • Powered by its strong earnings growth of 496.15% and other important driving factors, this stock has surged by 42.57% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.

Spectrum Brands Holdings, Inc., together with its subsidiaries, operates as a consumer products company worldwide. The company operates through Global Batteries & Appliances, Global Pet Supplies, Home and Garden Business, and Hardware & Home Improvement segments. Spectrum has a market cap of $4.06 billion and is part of the industrial goods sector and industrial industry. Shares are up 9.3% year to date as of the close of trading on Wednesday.

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

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

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