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) -- US Global Investors (Nasdaq:GROW) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and poor profit margins.
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- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 51.68%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 66.66% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, GROW is still more expensive than most of the other companies in its industry.
- U S GLOBAL INVESTORS 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. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, U S GLOBAL INVESTORS INC reported lower earnings of $0.10 versus $0.51 in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has significantly decreased by 59.4% when compared to the same quarter one year ago, falling from $0.41 million to $0.17 million.
- 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 Capital Markets industry and the overall market on the basis of return on equity, U S GLOBAL INVESTORS INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for U S GLOBAL INVESTORS INC is currently extremely low, coming in at 6.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.02% significantly trails the industry average.
-- Written by a member of TheStreet Ratings Staff
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