NEW YORK (TheStreet) -- Magal Security Systems (Nasdaq:MAGS) has been upgraded by TheStreet Ratings from hold to buy. 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, notable return on equity, attractive valuation levels 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.
Highlights from the ratings report include:
MAGS's very impressive revenue growth greatly exceeded the industry average of 6.2%. Since the same quarter one year prior, revenues leaped by 122.9%. Growth in the company's revenue appears to have helped boost the earnings per share. MAGS's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, MAGS has a quick ratio of 1.80, which demonstrates the ability of the company to cover short-term liquidity needs. The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, MAGAL SECURITY SYSTEMS's return on equity exceeds that of both the industry average and the S&P 500. 45.80% is the gross profit margin for MAGAL SECURITY SYSTEMS which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 12.60% is above that of the industry average.
Magal Security Systems Ltd., together with its subsidiaries, develops, manufactures, markets, and sells computerized security systems used to automatically detect and deter human intrusion primarily in Israel, North America, Europe, South and Latin America, and Africa. The company has a P/E ratio of 12.3, below the average diversified services industry P/E ratio of 12.8 and below the S&P 500 P/E ratio of 17.7. Magal Security Systems has a market cap of $65 million and is part of the services sector and diversified services industry. Shares are up 45.2% year to date as of the close of trading on Thursday.
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