NEW YORK (TheStreet) -- Ampco-Pittsburgh Corporation (NYSE:AP) has been downgraded by TheStreet Ratings from buy 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, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- AP's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, AP has a quick ratio of 1.61, which demonstrates the ability of the company to cover short-term liquidity needs.
- AMPCO-PITTSBURGH CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, AMPCO-PITTSBURGH CORP increased its bottom line by earning $2.05 versus $1.50 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 Machinery industry. The net income has significantly decreased by 73.9% when compared to the same quarter one year ago, falling from $7.68 million to $2.00 million.
- The gross profit margin for AMPCO-PITTSBURGH CORP is rather low; currently it is at 23.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.70% trails that of the industry average.
-- Written by a member of TheStreet Ratings Staff
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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