NEW YORK (TheStreet) -- Alere
(ALR - Get Report) shares are up 6.7% to $36.11 on Monday as investors have reacted positively to the company's announcement that it is reviewing its strategy and separating the roles of its CEO and chairman.
The point-of-care and diagnostic health services provider announced that the company's board of directors had unanimously elected Gregg J. Powers as the new board chairman. Former chairman Ron Zwanziger will continue in his role as CEO, president and board member.
The company also said that it would seek advice from an unnamed international consulting firm to "identify opportunities to enhance shareholder value."
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TheStreet Ratings team rates ALERE INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ALERE INC (ALR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and generally higher debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, ALR's share price has jumped by 31.32%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- Net operating cash flow has increased to $105.91 million or 49.03% when compared to the same quarter last year. In addition, ALERE INC has also vastly surpassed the industry average cash flow growth rate of -25.99%.
- ALERE 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 reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ALERE INC continued to lose money by earning -$1.13 versus -$1.23 in the prior year. This year, the market expects an improvement in earnings ($2.56 versus -$1.13).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, ALERE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 150.0% when compared to the same quarter one year ago, falling from $12.45 million to -$6.22 million.
- You can view the full analysis from the report here: ALR Ratings Report