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) -- A.H. Belo Corporation (NYSE: AHC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, solid stock price performance and growth in earnings per share. 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 Media industry. The net income increased by 559.6% when compared to the same quarter one year prior, rising from $2.67 million to $17.64 million.
- AHC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, AHC has a quick ratio of 2.27, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 60.67% to $8.52 million when compared to the same quarter last year. In addition, A. H. BELO CORP has also vastly surpassed the industry average cash flow growth rate of -11.72%.
- Powered by its strong earnings growth of 63.63% and other important driving factors, this stock has surged by 102.05% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- A. H. BELO 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, A. H. BELO CORP reported lower earnings of $0.31 versus $0.35 in the prior year. This year, the market expects an improvement in earnings ($0.32 versus $0.31).