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NEW YORK (TheStreet) -- Avalon Holdings (AWX) - Get Avalon Holdings Corporation Class A Report has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate AVALON HOLDINGS CORP (AWX) a SELL. This is driven by multiple 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, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself."
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 when compared to that of the S&P 500 and the Commercial Services & Supplies industry. The net income has significantly decreased by 119.2% when compared to the same quarter one year ago, falling from $0.46 million to -$0.09 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Commercial Services & Supplies industry and the overall market, AVALON HOLDINGS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for AVALON HOLDINGS CORP is rather low; currently it is at 17.13%. AWX has continued with the weak profit margin when compared to the same quarter of last year. Despite the mixed results of the gross profit margin, AWX's net profit margin of -0.67% significantly underperformed when compared to the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.92%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 127.27% compared to the year-earlier quarter. 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.
- AVALON HOLDINGS 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, AVALON HOLDINGS CORP turned its bottom line around by earning $0.10 versus -$0.09 in the prior year.
- You can view the full analysis from the report here: AWX Ratings Report