NEW YORK (TheStreet) -- China Recycling Energy (CREG - Get Report) was gaining 12.2% to $1.56 on Thursday after the company announced that chairman and CEO Guohua Ku will purchase about 13.8 million shares.
Ku will purchase the shares at $1.37 each. The price is the average closing price of the stock over the 15 trading days before August 25, when the share purchase agreement was approved by the board of directors.
TheStreet Ratings team rates CHINA RECYCLING ENERGY CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHINA RECYCLING ENERGY CORP (CREG) 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 attractive valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for CHINA RECYCLING ENERGY CORP is currently very high, coming in at 99.81%. It has increased significantly from the same period last year. Along with this, the net profit margin of 48.17% significantly outperformed against the industry average.
- The debt-to-equity ratio is somewhat low, currently at 0.78, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.89 is somewhat weak and could be cause for future problems.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Commercial Services & Supplies industry average. The net income has decreased by 5.3% when compared to the same quarter one year ago, dropping from $3.30 million to $3.12 million.
- Net operating cash flow has significantly decreased to -$17.75 million or 3186.78% 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: CREG Ratings Report
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