Global Sources Ltd. Stock Upgraded (GSOL)
NEW YORK (TheStreet) -- Global Sources (Nasdaq:GSOL) 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, attractive valuation levels, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 19.7%. Since the same quarter one year prior, revenues rose by 14.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for GLOBAL SOURCES LTD is rather high; currently it is at 66.40%. It has increased significantly from the same period last year. Along with this, the net profit margin of 16.10% is above that of the industry average.
- GSOL 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. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
- GLOBAL SOURCES LTD's earnings per share declined by 10.8% 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, GLOBAL SOURCES LTD increased its bottom line by earning $0.82 versus $0.65 in the prior year. This year, the market expects an improvement in earnings ($0.88 versus $0.82).
Global Sources Ltd. operates as a business-to-business media company primarily in greater China. It provides sourcing information to volume buyers and integrated marketing services to suppliers. The company offers trade information using online media, print media, and face-to-face events. The company has a P/E ratio of 7.5, above the average internet industry P/E ratio of 6.4 and below the S&P 500 P/E ratio of 17.7. Global Sources has a market cap of $180 million and is part of the technology sector and internet industry. Shares are up 29.1% year to date as of the close of trading on Wednesday.