NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and generally poor debt management.
Highlights from the ratings report include:
- BLT's revenue growth has slightly outpaced the industry average of 16.3%. Since the same quarter one year prior, revenues rose by 25.1%. 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.
- BLOUNT INTL INC has exprienced 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 reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BLOUNT INTL INC increased its bottom line by earning $1.00 versus $0.85 in the prior year. This year, the market expects an improvement in earnings ($1.21 versus $1.00).
- 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. Compared to other companies in the Machinery industry and the overall market, BLOUNT INTL INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- 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 Machinery industry. The net income has significantly decreased by 62.3% when compared to the same quarter one year ago, falling from $15.62 million to $5.88 million.
- The debt-to-equity ratio is very high at 6.37 and currently higher than the industry average, implying that there is very poor management of debt levels within the company.
Blount International, Inc., together with its subsidiaries, designs, manufactures, and markets equipment, replacement and component parts, and accessories to forestry, lawn and garden, farm, ranch, agriculture, and construction sectors in the United States and internationally. The company has a P/E ratio of 16.1, equal to the average consumer durables industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Blount International has a market cap of $646.6 million and is part of the
industry. Shares are down 9.2% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet Ratings Staff