TSC Ratings' Updates: Genzyme

Shares are down 24.25% over the past year, reflecting the market's overall time (which was actually deeper) and the sharp decline in the company's EPS. We do not see anything in this company's numbers that would change the one-year trend. It was down over the last 12 months, and it could be down again in the next 12. Naturally, a bull or bear market could sway the movement of this stock.

We've downgraded Central European Distribution(CEDC Quote) from buy to hold. Strengths include its robust revenue growth and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and weak operating cash flow.

The company's very impressive revenue growth of 51% since the same quarter last year greatly exceeded the industry average of 7.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a steep decline in earnings per share in the most recent quarter. During the past fiscal year, it increased its bottom line by earning $1.89 vs. $1.51 in the prior year. This year, the market expects an improvement in earnings to $2.81.

Central European Distribution's return on equity has slightly decreased from the same quarter one year prior, implying a minor weakness in the organization and underperforming both the industry average and the S&P 500. Net income has significantly decreased, by 96.1% to $660,000, when compared with the same quarter a year ago, underperforming both the S&P 500 and the beverages industry.