NEW YORK (TheStreet) -- Alon Holdings Blue Square - Israel (NYSE:BSI) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, unimpressive growth in net income, generally weak debt management and poor profit margins. Highlights from the ratings report include:
- ALON HOLDINGS BLUE SQUARE IS's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, ALON HOLDINGS BLUE SQUARE IS reported lower earnings of $0.25 versus $0.30 in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Food & Staples Retailing industry. The net income has significantly decreased by 11570.7% when compared to the same quarter one year ago, falling from -$0.14 million to -$16.34 million.
- The debt-to-equity ratio is very high at 4.16 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. To add to this, BSI has a quick ratio of 0.60, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- The gross profit margin for ALON HOLDINGS BLUE SQUARE IS is rather low; currently it is at 24.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.20% trails that of the industry average.
- This stock's share value has moved by only 63.78% over the past year. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
-- Written by a member of TheStreet Ratings Staff
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