NEW YORK (TheStreet) -- Shares of Verso Paper Corp. (VRS - Get Report) are down -10.50% to $2.13 on heavy trading volume as the producer of coated papers said that the New York Stock Exchange notified them, saying that they achieved early compliance with the NYSE's market capitalization continued listing standard.
Separately, Verso is in the process of acquiring NewPage Group, a maker of coated and specialty paper.
TheStreet Ratings team rates VERSO PAPER CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate VERSO PAPER CORP (VRS) a SELL. This is driven by a few notable weaknesses, 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 deteriorating net income and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Paper & Forest Products industry. The net income has significantly decreased by 136.1% when compared to the same quarter one year ago, falling from -$38.38 million to -$90.61 million.
- Net operating cash flow has decreased to -$96.28 million or 15.65% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, VERSO PAPER CORP has marginally lower results.
- VRS, with its decline in revenue, slightly underperformed the industry average of 8.3%. Since the same quarter one year prior, revenues fell by 10.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- VERSO PAPER CORP 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, VERSO PAPER CORP continued to lose money by earning -$2.09 versus -$3.29 in the prior year.
- Compared to its closing price of one year ago, VRS's share price has jumped by 137.86%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in VRS do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- You can view the full analysis from the report here: VRS Ratings Report