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NEW YORK (TheStreet) -- Continental Materials (CUO) - Get Continental Materials Corporation Report has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
TheStreet Ratings team rates CONTINENTAL MATERIALS CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CONTINENTAL MATERIALS CORP (CUO) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. 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."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CONTINENTAL MATERIALS CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, CONTINENTAL MATERIALS CORP swung to a loss, reporting -$0.53 versus $2.09 in the prior year.
- 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 Construction Materials industry. The net income has significantly decreased by 1591.3% when compared to the same quarter one year ago, falling from -$0.24 million to -$4.09 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 Construction Materials industry and the overall market, CONTINENTAL MATERIALS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for CONTINENTAL MATERIALS CORP is currently extremely low, coming in at 13.01%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -11.91% is significantly below that of the industry average.
- In its most recent trading session, CUO 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. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- You can view the full analysis from the report here: CUO Ratings Report