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"We rate SP PLUS CORP (SP) a BUY. This is driven by multiple 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 impressive record of earnings per share growth, revenue growth, reasonable valuation levels, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SP PLUS 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 year. We feel that this trend should continue. During the past fiscal year, SP PLUS CORP increased its bottom line by earning $0.54 versus $0.21 in the prior year. This year, the market expects an improvement in earnings ($0.77 versus $0.54).
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.2%. Since the same quarter one year prior, revenues slightly increased by 1.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has significantly increased by 98.24% to $32.76 million when compared to the same quarter last year. In addition, SP PLUS CORP has also vastly surpassed the industry average cash flow growth rate of -11.78%.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Commercial Services & Supplies industry and the overall market, SP PLUS CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: SP Ratings Report