NEW YORK (TheStreet) -- WPCS (WPCS), maker of engineering services for communications infrastructure, spiked 73% to $2.59 on Friday following the beta launch of its BTX Trader Bitcoin trading software.
The new software is designed to allow traders to gather information and trade Bitcoins on five different exchanges including the popular MT. Gox exchange. The software is available now at btxtrader.com.
According to Mt. Gox one Bitcoin is currently worth $793.71. Prices for the volatile virtual currency rose as high as $1240 and fell to $450 in the month of December alone.
TheStreet Ratings team rates WPCS INTERNATIONAL INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:"We rate WPCS INTERNATIONAL INC (WPCS) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 IT Services industry and the overall market, WPCS INTERNATIONAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for WPCS INTERNATIONAL INC is rather low; currently it is at 23.84%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -6.43% is significantly below that of the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 39.29%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 173.46% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- WPCS INTERNATIONAL INC has experienced 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 not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, WPCS INTERNATIONAL INC continued to lose money by earning -$7.35 versus -$16.73 in the prior year.
- WPCS's debt-to-equity ratio of 0.95 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. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.77 is weak.
- You can view the full analysis from the report here: WPCS Ratings Report
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