NEW YORK (TheStreet) -- Compass Minerals International (NYSE:CMP) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.
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- CMP, with its decline in revenue, slightly underperformed the industry average of 2.2%. Since the same quarter one year prior, revenues slightly dropped by 0.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market, COMPASS MINERALS INTL INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $18.60 million or 20.17% when compared to the same quarter last year. Despite a decrease in cash flow of 20.17%, COMPASS MINERALS INTL INC is in line with the industry average cash flow growth rate of -23.92%.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Metals & Mining industry. The net income has significantly decreased by 32.1% when compared to the same quarter one year ago, falling from $14.00 million to $9.50 million.
- The gross profit margin for COMPASS MINERALS INTL INC is currently lower than what is desirable, coming in at 28.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.30% significantly trails 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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