NEW YORK (TheStreet) -- Nash-Finch Company (Nasdaq:NAFC) 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, deteriorating net income, generally weak debt management, disappointing return on equity and poor profit margins.
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- The debt-to-equity ratio of 1.10 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, NAFC maintains a poor quick ratio of 0.86, which illustrates the inability to avoid short-term cash problems.
- 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 Food & Staples Retailing industry and the overall market, NASH FINCH CO's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for NASH FINCH CO is currently extremely low, coming in at 8.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -7.80% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to $5.59 million or 82.47% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- NASH FINCH CO 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, NASH FINCH CO reported lower earnings of $2.73 versus $3.88 in the prior year. For the next year, the market is expecting a contraction of 9.9% in earnings ($2.46 versus $2.73).
-- 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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