NEW YORK (TheStreet) -- Shares of Visteon Corp. (VC) are up 1.80% to $89.02 after the auto parts maker said it would sell most of its automotive interiors business to private equity firm Cerberus Capital Management LP as it focuses on its fast-growing climate control and electronics operations, Reuters reports.
The sale price wasn't disclosed.
The business contributed about $1 billion to the company's 2013 sales of $7.4 billion, Reuters said.
TheStreet Ratings team rates VISTEON CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate VISTEON CORP (VC) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- VC's revenue growth has slightly outpaced the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 7.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, VC has a quick ratio of 1.65, which demonstrates the ability of the company to cover short-term liquidity needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Auto Components industry and the overall market, VISTEON CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Powered by its strong earnings growth of 1294.59% and other important driving factors, this stock has surged by 58.25% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- You can view the full analysis from the report here: VC Ratings Report