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Con-way Inc Stock Downgraded (CNW)

Editor's Note: 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.

NEW YORK (TheStreet) -- Con-way (NYSE:CNW) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive 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.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.9%. Since the same quarter one year prior, revenues slightly increased by 2.0%. 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.
  • CNW's debt-to-equity ratio of 0.92 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that CNW's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.51 is high and demonstrates strong liquidity.
  • The gross profit margin for CON-WAY INC is currently extremely low, coming in at 7.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.80% significantly trails the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Road & Rail industry average. The net income has decreased by 13.1% when compared to the same quarter one year ago, dropping from $29.13 million to $25.30 million.
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Con-way Inc., together with its subsidiaries, provides transportation, logistics, and supply chain management services to various manufacturing, industrial, and retail customers in North America and internationally. The company has a P/E ratio of 13.1, below the S&P 500 P/E ratio of 17.7. Con-way has a market cap of $1.51 billion and is part of the services sector and transportation industry. Shares are down 7.6% year to date as of the close of trading on Friday.

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

-- Written by a member of TheStreet Ratings Staff

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