Asia Entertainment & Resources Ltd. Stock Upgraded (AERL)
NEW YORK (TheStreet) -- Asia Entertainment & Resources (Nasdaq:AERL) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year. Highlights from the ratings report include:
- Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, ASIA ENTERTAINMENT & RES LTD's return on equity significantly exceeds that of both the industry average and the S&P 500.
- AERL's very impressive revenue growth greatly exceeded the industry average of 14.2%. Since the same quarter one year prior, revenues leaped by 160.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- AERL's debt-to-equity ratio of 0.85 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.80 is very high and demonstrates very strong liquidity.
- The gross profit margin for ASIA ENTERTAINMENT & RES LTD is currently lower than what is desirable, coming in at 28.60%. Regardless of AERL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AERL's net profit margin of 36.10% significantly outperformed against the industry.
- AERL's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 45.90%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, 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.
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 Plus 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