NEW YORK (
) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.
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Highlights from the ratings report include:
- CENTURY ALUMINUM CO 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, CENTURY ALUMINUM CO reported lower earnings of $0.07 versus $0.57 in the prior year. For the next year, the market is expecting a contraction of 357.1% in earnings (-$0.18 versus $0.07).
- 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 Metals & Mining industry. The net income has significantly decreased by 151.2% when compared to the same quarter one year ago, falling from $23.99 million to -$12.28 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. Compared to other companies in the Metals & Mining industry and the overall market, CENTURY ALUMINUM CO's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for CENTURY ALUMINUM CO is currently extremely low, coming in at 6.70%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -3.80% is significantly below that of 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 60.55%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 158.33% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
Century Aluminum Company, through its subsidiaries, produces primary aluminum in the United States, China, and Iceland. The company offers high purity primary aluminum, molten aluminum, standard-grade ingots, extrusion billets, and other value-added primary aluminum products. Century Aluminum has a market cap of $524.5 million and is part of the
industry. Shares are down 33.8% year to date as of the close of trading on Thursday.
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-- Written by a member of TheStreet Ratings Staff
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.