NEW YORK (TheStreet) -- Multi-Fineline Electronix (Nasdaq:MFLX) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and weak operating cash flow.
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- MFLX has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.43, which illustrates the ability to avoid short-term cash problems.
- Compared to its closing price of one year ago, MFLX's share price has jumped by 30.09%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- MULTI-FINELINE ELECTRON INC 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 reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MULTI-FINELINE ELECTRON INC increased its bottom line by earning $1.56 versus $1.16 in the prior year. This year, the market expects an improvement in earnings ($1.64 versus $1.56).
- The gross profit margin for MULTI-FINELINE ELECTRON INC is rather low; currently it is at 17.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.30% trails that of the industry average.
- Net operating cash flow has decreased to $11.81 million or 28.53% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
-- 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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