TSC Ratings' Updates: Getty Realty
The following ratings changes were generated on Friday, Dec. 19.
We've upgraded property and casual insurance company CastlePoint Holdings (CPHL) from sell to hold. Strengths include its robust revenue growth, good cash flow from operations and notable return on equity. However, we also find weaknesses including deteriorating net income and poor profit margins.
Revenue leaped by 62.8% since the same quarter last year, outperforming the industry average of 6.6% growth, though earnings per share declined. Net operating cash flow has increased to $51.24 million, or 42% compared with the same quarter last year, vastly surpassing the industry average cash flow growth rate of -12.26%.
CastlePoint underperforms both the S&P 500 and the industry average on the basis of return on equity. The company's gross profit margin is extremely low at 2.6%, having decreased significantly from the same period last year, and its net profit margin of -10.7% is below the industry average. Net income decreased from $10.5 million to -$13.15 million, underperforming the S&P 500 and the insurance industry.We've downgraded Gruma (GMK), which manufactures and distributes corn flour, tortillas, wheat flour and related products, from hold to sell, driven by its deteriorating net income, disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share. Net income decreased from $72.2 million to -$164.4 million compared with the same quarter a year ago, significantly underperforming the food products industry as well as the S&P 500. Return on equity has also greatly decreased from the same quarter one year prior, a signal of major weakness. Gruma's gross profit margin is currently lower than what is desirable at 33.10%, having decreased from the same quarter the previous year, and its the net profit margin of -19.10% is significantly below that of the industry average.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV