NEW YORK (TheStreet) -- Investment Technology Group (NYSE:ITG) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins. Highlights from the ratings report include:
- ITG's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- Net operating cash flow has significantly increased by 55.37% to $122.45 million when compared to the same quarter last year. Despite an increase in cash flow of 55.37%, INVESTMENT TECHNOLOGY GP INC is still growing at a significantly lower rate than the industry average of 455.29%.
- Despite the weak revenue results, ITG has outperformed against the industry average of 30.1%. Since the same quarter one year prior, revenues slightly dropped by 6.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Capital Markets industry and the overall market, INVESTMENT TECHNOLOGY GP INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for INVESTMENT TECHNOLOGY GP INC is rather low; currently it is at 15.50%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.80% is significantly below that of the industry average.
-- Written by a member of TheStreet RatingsStaff
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