Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
NEW YORK (
-- ACCO Brands
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
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Highlights from the ratings report include:
- ACCO's revenue growth has slightly outpaced the industry average of 7.2%. Since the same quarter one year prior, revenues slightly increased by 0.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- 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 Commercial Services & Supplies industry. The net income has significantly decreased by 89.9% when compared to the same quarter one year ago, falling from $94.20 million to $9.50 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Commercial Services & Supplies industry and the overall market, ACCO BRANDS CORP's return on equity is below that of both the industry average and the S&P 500.
ACCO Brands Corporation engages in the design, manufacture, marketing, and distribution of school and office products primarily in the United States, Northern Europe, Canada, Australia, Brazil, and Mexico. ACCO has a market cap of $777.2 million and is part of the consumer goods sector and consumer non-durables industry. Shares are down 6.8% year to date as of the close of trading on Thursday.
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