NEW YORK (TheStreet) -- Colony Financial (CLNY) - Get Colony Capital, Inc. Class A Report shares are down 1% to $24.33 in trading on Wednesday after the real estate investment and financial services company announced that it bought industrial properties company Cobalt Capital Partners for $1.6 billion.
"We have consistently signaled that Colony Financial can achieve additional growth and diversification by launching focused platforms that will grow foundational returns and pursue expansion through bolt-on acquisitions," said the company.
TheStreet Ratings team rates COLONY FINANCIAL INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate COLONY FINANCIAL INC (CLNY) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CLNY's very impressive revenue growth greatly exceeded the industry average of 13.8%. Since the same quarter one year prior, revenues leaped by 59.4%. 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 net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 47.3% when compared to the same quarter one year prior, rising from $26.45 million to $38.95 million.
- The gross profit margin for COLONY FINANCIAL INC is currently very high, coming in at 74.89%. Regardless of CLNY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CLNY's net profit margin of 50.40% significantly outperformed against the industry.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- COLONY FINANCIAL INC's earnings per share declined by 6.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, COLONY FINANCIAL INC reported lower earnings of $1.19 versus $1.34 in the prior year. This year, the market expects an improvement in earnings ($1.55 versus $1.19).
- You can view the full analysis from the report here: CLNY Ratings Report