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"We rate ALON USA ENERGY INC (ALJ) a BUY. This is driven by a few notable strengths, 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 increase in net income, good cash flow from operations, solid stock price performance, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 234.0% when compared to the same quarter one year prior, rising from -$28.71 million to $38.48 million.
- Net operating cash flow has significantly increased by 662.09% to $112.94 million when compared to the same quarter last year. In addition, ALON USA ENERGY INC has also vastly surpassed the industry average cash flow growth rate of -6.46%.
- Powered by its strong earnings growth of 217.02% and other important driving factors, this stock has surged by 25.22% 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.
- ALON USA ENERGY INC 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, ALON USA ENERGY INC reported lower earnings of $0.29 versus $1.15 in the prior year. This year, the market expects an improvement in earnings ($0.82 versus $0.29).
- ALJ, with its decline in revenue, slightly underperformed the industry average of 1.9%. Since the same quarter one year prior, revenues slightly dropped by 2.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: ALJ Ratings Report