We've downgraded Tufco Technologies (TFCO), which provides integrated manufacturing services, from hold to sell, driven by its generally disappointing historical performance in the stock itself, feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and poor profit margins.
Net income decreased by 94.6%, from $520,000 to $30,000, since the same quarter a year ago, underperforming the S&P 500 and the commercial services and supplies industry. The company's current return on equity has slightly decreased from the same quarter one year prior, implying a minor weakness in the organization and underperforming the industry and the S&P 500. Tufco's 4.3% gross profit margin is extremely low, having decreased from the same quarter last year, and its net profit margin of 0.1% trails the industry average.
Tufco has experienced a steep decline in EPS or 90.9% in the most recent quarter compared with the same quarter a year ago, continuing a two-year pattern of declining EPS. During the past fiscal year, Tufco reported lower earnings of 13 cents versus 21 cents in the prior year. Shares are down 45.8% on the year, underperforming the S&P 500, but don't assume that the stock can now be tagged as cheap and attractive. Based on its current price in relation to its earnings, Tufco is still more expensive than most of the other companies in its industry.
All ratings changes generated on Dec. 22 are listed below.
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