NEW YORK (TheStreet) -- Martha Stewart Living Omnimedia (NYSE:MSO) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself. Highlights from the ratings report include:
- MSO has underperformed the S&P 500 Index, declining 6.38% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market, MARTHA STEWART LIVING OMNIMD's return on equity significantly trails that of both the industry average and the S&P 500.
- MSO, with its decline in revenue, underperformed when compared the industry average of 15.4%. Since the same quarter one year prior, revenues slightly dropped by 5.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- MARTHA STEWART LIVING OMNIMD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MARTHA STEWART LIVING OMNIMD reported poor results of -$0.29 versus -$0.18 in the prior year. This year, the market expects an improvement in earnings ($0.01 versus -$0.29).
- 42.20% is the gross profit margin for MARTHA STEWART LIVING OMNIMD which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -7.30% is in-line with the industry average.
-- Written by a member of TheStreet Ratings Staff
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