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 revenue growth and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and weak operating cash flow.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 24.6%. Since the same quarter one year prior, revenues rose by 10.3%. 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.
- The gross profit margin for BUNGE LTD is currently extremely low, coming in at 4.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.70% trails that of the industry average.
- 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 Food Products industry and the overall market, BUNGE LTD's return on equity is below that of both the industry average and the S&P 500.
Bunge Limited, through its subsidiaries, engages in the agriculture and food businesses worldwide. The company has a P/E ratio of 11.8, equal to the average food & beverage industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Bunge has a market cap of $8.84 billion and is part of the
industry. Shares are up 5.8% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff