Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK (TheStreet) -- Excel (NYSE:EXL) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.
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- EXL has underperformed the S&P 500 Index, declining 6.74% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, EXCEL TRUST INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for EXCEL TRUST INC is rather low; currently it is at 21.52%. Regardless of EXL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, EXL's net profit margin of 46.50% significantly outperformed against the industry.
- Net operating cash flow has increased to $17.55 million or 43.26% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 8.67%.
- EXCEL TRUST INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, EXCEL TRUST INC continued to lose money by earning -$0.27 versus -$0.42 in the prior year. This year, the market expects an improvement in earnings ($0.11 versus -$0.27).
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