TSC Ratings' Updates: Cablevision

We've downgraded Kyocera(KYO Quote), which produces, and distributes fine ceramic and semiconductor parts, and telecommunications equipment worldwide, from hold to sell driven by its weak operating cash flow, decline in the stock price during the past year and feeble growth in its earnings per share.

Net operating cash flow has decreased to $254.20 million, or 37.78% when compared with the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower. Kyocera's EPS declined by 7.2% in the most recent quarter compared with the same quarter a year ago, and we feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, Kyocera increased its bottom line by earning $5.66 vs. $4.55 in the prior year, but for the next year, the market is expecting a contraction of 47.9% in earnings to $2.95.

Net income decreased by 7.4%, from $237.81 million to $220.26 million. The return on equity has improved slightly over the same quarter one year prior, which can be construed as a modest strength in the organization. Kyocer's ROE is below that of both the electronic equipment, instruments and components industry and the S&P 500.

Shares are down 38.76% on the year, probably driven by the decline of similar magnitude in the overall market, as well as by lower earnings per share compared with the same quarter one year earlier. In one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.