Cubic Corporation (CUB), ITT Corp (ITT), Westport Innovations Inc. (USA) (WPRT): Friday’s Top Upgrades (and Downgrades)

As a result, ITT shares that look overpriced when valued on P/E, are even more expensive when valued on FCF.

And speaking of free cash flow…
Cubic Corporation (NYSE:CUB) finally generated a bit of free cash flow. Yesterday’s earnings release showed the company generating nearly $47 million worth of greenbacks, and put an end to a six-quarter-long cash drought at the company. This fact, plus beats on both revenues and GAAP earnings, helped turn The Benchmark Company from a holder of Cubic Corporation (NYSE:CUB) stock into a buyer this morning. And if truth be told, this news is a real positive for Cubic Corporation (NYSE:CUB).

However, the fact still remains that this San Diego manufacturer of fare collection systems, “smart” card readers, and military-grade electronics is still free cash flow negative for the past 12 months. It’s still trading for more than 17 times earnings, and still expected to grow those earnings in only the high single digits, percentage-wise, over the next five years.

This all leaves the stock still looking overpriced. Now, if Cubic Corporation (NYSE:CUB) can string together a few more quarters of $50 million-ish cash production, I’d probably be inclined to think that the stock is closer to fairly valued. As things stand, though, one quarter does not a good buy thesis make. Cubic Corporation (NYSE:CUB) remains a show-me stock.

The article Friday’s Top Upgrades (and Downgrades) originally appeared on Fool.com and is written by Rich Smith.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Cubic and Westport Innovations. The Motley Fool owns shares of Westport Innovations.

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