Associated Estates Realty Corp Stock Upgraded (AEC)

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) -- Associated Estates Realty (NYSE: AEC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, reasonable valuation levels, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows low profit margins.

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Highlights from the ratings report include:
  • AEC's revenue growth has slightly outpaced the industry average of 10.1%. Since the same quarter one year prior, revenues rose by 10.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, ASSOCIATED ESTATES RLTY CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • Powered by its strong earnings growth of 5250.00% and other important driving factors, this stock has surged by 25.37% 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.
  • ASSOCIATED ESTATES RLTY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ASSOCIATED ESTATES RLTY CORP turned its bottom line around by earning $0.08 versus -$0.01 in the prior year. This year, the market expects an improvement in earnings ($1.93 versus $0.08).

Associated Estates Realty Corporation is an independent real estate investment trust. The firm invests in the real estate markets of the United States. It specializes in owning and managing apartment communities in the Midwest, Mid-Atlantic and Southeast regions of the United States. Associated Estates has a market cap of $1.05 billion and is part of the financial sector and real estate industry. Shares are up 14.9% year to date as of the close of trading on Tuesday.

You can view the full Associated Estates 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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