NEW YORK (
-- China Integrated Energy
) 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, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and poor profit margins.
Highlights from the ratings report include:
- 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. In comparison to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, CHINA INTEGRATED ENERGY INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
- CBEH's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 58.31%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
- CBEH's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.26, which clearly demonstrates the ability to cover short-term cash needs.
- The revenue growth came in higher than the industry average of 3.9%. Since the same quarter one year prior, revenues rose by 26.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
China Integrated Energy, Inc. operates as an integrated energy company in China. The company has a P/E ratio of 3.1, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 16.1. China Integrated Energy has a market cap of $155.6 million and is part of the
industry. Shares are down 42.2% year to date as of the close of trading on Tuesday.
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