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Why RF Industries (RFIL) is Down Friday

Stocks in this article: RFIL

NEW YORK (TheStreet) -- RF Industries (RFIL) shares fell more than 20% to $6.78 and was the biggest percentage decliner on the NASDAQ for the day after the company announced preliminary, unaudited fourth-quarter and full year earnings.

For the quarter ending Oct. 31, 2013, the company reported its preliminary unaudited revenues decreased by 9% year-over-year to $9.3 million.

However, for the fiscal year, preliminary unaudited revenues increased 32% to $36.6 million from $27.7 million in fiscal 2012. For the full year, the company earned 65 cents per basic share, up from 38 cents per share in the year ago period.

"During most of 2013, we saw increased demand for our offerings across all end markets, which resulted in solid revenue growth for the year," said RF Industries Chief Executive Officer Howard Hill. "Our Cables Unlimited division was particularly strong and generated over 90% of our company's overall revenue growth in fiscal 2013. The revenue growth at Cables Unlimited was the result of sales of its OptiFlex power and fiber optic cabling system that is marketed for use with cell towers."

RF Industries sold both its RF Neulink and RadioMobile divisions in 2013, which made up the company's RF Wireless segment.

TheStreet Ratings team rates R F INDUSTRIES LTD as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate R F INDUSTRIES LTD (RFIL) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and impressive record of earnings per share growth. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 0.6%. Since the same quarter one year prior, revenues rose by 31.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • RFIL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.75, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, R F INDUSTRIES LTD's return on equity exceeds that of both the industry average and the S&P 500.
  • Powered by its strong earnings growth of 30.00% and other important driving factors, this stock has surged by 102.92% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • R F INDUSTRIES LTD has improved earnings per share by 30.0% 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. During the past fiscal year, R F INDUSTRIES LTD increased its bottom line by earning $0.35 versus $0.11 in the prior year.

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