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Why Manchester United (MANU) Stock Is Higher This Morning

NEW YORK (TheStreet) -- Shares of Manchester United Plc  (MANU) are up 2.17% to $16.97 following the release of the British soccer club's third quarter 2014 fiscal results ended March 31.

The company reported a profit of GBP10.9 million, up from GBP3.6 million a year ago, as per-share earnings were up to GBP6.66 from GBP2.22.

Revenue jumped 26% to GBP115.5 million.

Must Read: Warren Buffett's 10 Favorite Growth Stocks

Analysts polled by Thomson Reuters predicted per-share earnings of GBP5 on revenue of GBP111 million.

Manchester United maintained its 2014 fiscal revenues and earnings outlook.

TheStreet Ratings team rates MANCHESTER UNITED PLC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate MANCHESTER UNITED PLC (MANU) 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 robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself."

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

  • MANU's revenue growth has slightly outpaced the industry average of 14.7%. Since the same quarter one year prior, revenues rose by 15.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MANCHESTER UNITED PLC has improved earnings per share by 18.8% 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, MANCHESTER UNITED PLC increased its bottom line by earning $1.37 versus $0.22 in the prior year. This year, the market expects an improvement in earnings ($17.81 versus $1.37).
  • The debt-to-equity ratio is somewhat low, currently at 0.73, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that MANU's debt-to-equity ratio is low, the quick ratio, which is currently 0.58, displays a potential problem in covering short-term cash needs.
  • MANU has underperformed the S&P 500 Index, declining 6.95% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • Net operating cash flow has significantly decreased to -$5.28 million or 112.74% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: MANU Ratings Report

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