TSC Ratings' Updates: Goldman

The following ratings changes were generated on Monday, Oct. 20.

We've downgraded Gentex(GNTX Quote), which designs, develops, manufactures and markets proprietary products employing electro-optic technology, from buy to hold. Strengths include its revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. Weaknesses include a generally disappointing performance in the stock itself, premium valuation and weak operating cash flow.

Gentex's revenue growth of 4.3% since the same quarter one year ago slightly outpaced the industry average of 2.4%, but EPS declined. The company has no debt to speak of, resulting in a debt-to-equity ratio of zero. It also maintains a quick ratio of 6.42, clearly demonstrating its ability to cover short-term cash needs. Its gross profit margin of 39.8% is strong but is a decrease from the same period last year. Its net profit margin of 15.8% significantly outperformed the industry. Net operating cash flow has decreased to $16.67 million, or 25.40% when compared with the same quarter last year. In addition, its growth rate is much lower than the industry average. ...