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NEW YORK (

TheStreet

)

-- BanColombia

(NYSE:

CIB

) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including deteriorating net income, feeble growth in the company's earnings per share and a generally disappointing performance in the stock itself.

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Highlights from the ratings report include:

  • The gross profit margin for BANCOLOMBIA SA is rather high; currently it is at 64.77%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.42% is above that of the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.0%. Since the same quarter one year prior, revenues slightly dropped by 1.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, CIB has underperformed the S&P 500 Index, declining 12.36% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • BANCOLOMBIA SA' earnings per share from the most recent quarter came in slightly below the year earlier quarter. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, BANCOLOMBIA SA reported lower earnings of $9.21 versus $11.35 in the prior year. For the next year, the market is expecting a contraction of 54.6% in earnings ($4.18 versus $9.21).
  • 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 Commercial Banks industry. The net income has decreased by 4.0% when compared to the same quarter one year ago, dropping from $269.58 million to $258.70 million.

Bancolombia S.A., a full service financial institution, provides various banking products and services to individual and corporate customers. BanColombia has a market cap of $7.33 billion and is part of the financial sector and banking industry. Shares are up 16.6% year to date as of the close of trading on Monday.

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BanColombia Ratings Report

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