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NEW YORK (
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we find that the stock has experienced relatively poor performance when compared with the S&P 500 during the past year.
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Highlights from the ratings report include:
- COMMUNITYONE BANCORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, COMMUNITYONE BANCORP continued to lose money by earning -$0.07 versus -$1.88 in the prior year. This year, the market expects an improvement in earnings ($0.42 versus -$0.07).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 187.7% when compared to the same quarter one year prior, rising from -$3.18 million to $2.79 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, COMMUNITYONE BANCORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.5%. Since the same quarter one year prior, revenues slightly dropped by 1.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- In its most recent trading session, COB has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
CommunityOne Bancorp operates as the bank holding company for CommunityOne Bank, N.A. that consumer, wealth management, mortgage, and business banking services to individual and business customers in North Carolina. CommunityOne has a market cap of $198 million and is part of the financial sector and banking industry. Shares are down 29.3% year to date as of the close of trading on Thursday.
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