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"We rate FREIGHTCAR AMERICA INC (RAIL) a BUY. This is driven by a number of 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income 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:
- RAIL's very impressive revenue growth greatly exceeded the industry average of 0.2%. Since the same quarter one year prior, revenues leaped by 166.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- RAIL 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, RAIL has a quick ratio of 1.75, which demonstrates the ability of the company to cover short-term liquidity needs.
- FREIGHTCAR AMERICA INC 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, FREIGHTCAR AMERICA INC turned its bottom line around by earning $0.47 versus -$1.62 in the prior year. This year, the market expects an improvement in earnings ($2.40 versus $0.47).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 139.1% when compared to the same quarter one year prior, rising from -$12.29 million to $4.81 million.
- Net operating cash flow has increased to $102.32 million or 11.22% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -10.56%.
- You can view the full analysis from the report here: RAIL Ratings Report