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"We rate MAGNETEK INC (MAG) a BUY. This is driven by several positive factors, 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 notable return on equity, revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to other companies in the Electrical Equipment industry and the overall market, MAGNETEK INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- MAG's revenue growth has slightly outpaced the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 0.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MAG 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, MAG has a quick ratio of 2.04, which demonstrates the ability of the company to cover short-term liquidity needs.
- Powered by its strong earnings growth of 105.55% and other important driving factors, this stock has surged by 84.41% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MAG should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- 36.72% is the gross profit margin for MAGNETEK INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.50% is above that of the industry average.
- You can view the full analysis from the report here: MAG Ratings Report
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