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Winthrop Realty Trust Inc. Stock Downgraded (FUR)

NEW YORK ( TheStreet) -- Winthrop Realty (NYSE: FUR) 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, revenue growth and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, deteriorating net income and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • Compared to its closing price of one year ago, FUR's share price has jumped by 31.12%, 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.
  • FUR's revenue growth trails the industry average of 18.2%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • 35.40% is the gross profit margin for WINTHROP REALTY TRUST which we consider to be strong. Regardless of FUR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 17.10% trails the industry average.
  • The change in net income from the same quarter one year ago has exceeded that of the Real Estate Investment Trusts (REITs) industry average, but is less than that of the S&P 500. The net income has decreased by 8.5% when compared to the same quarter one year ago, dropping from $3.67 million to $3.36 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, WINTHROP REALTY TRUST underperformed against that of the industry average and is significantly less than that of the S&P 500.

Operates as a real estate investment trust, headquartered in Boston. As of Dec. 31, 2005, in addition to cash reserves and government securities, the trust primarily owned an office building, commonly referred to as Circle Tower, located in Indianapolis, IN and 16 triple-net lease properties. The company has a P/E ratio of 60.4, equal to the average real estate industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Winthrop has a market cap of $379.3 million and is part of the financial sector and real estate industry. Shares are up 11% year to date as of the close of trading on Thursday.

You can view the full Winthrop Ratings Report or get investment ideas from our investment research center.

-- 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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