Editor's Note: 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
NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
Highlights from the ratings report include:
- The debt-to-equity ratio is somewhat low, currently at 0.73, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 3.27, which clearly demonstrates the ability to cover short-term cash needs.
- PLOW, with its very weak revenue results, has greatly underperformed against the industry average of 12.5%. Since the same quarter one year prior, revenues plummeted by 53.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for DOUGLAS DYNAMICS INC is currently lower than what is desirable, coming in at 29.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.68% is significantly below that of the industry average.
- Net operating cash flow has decreased to $50.71 million or 23.06% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
Douglas Dynamics, Inc. designs, manufactures, and sells snow and ice control equipment for light trucks in the United States and Canada. It products include snowplows, sand and salt spreaders, and related parts and accessories. The company has a P/E ratio of 55.5, above the S&P 500 P/E ratio of 17.7. Douglas Dynamics has a market cap of $320.9 million and is part of the consumer goods sector and automotive industry. Shares are down 3.1% year to date as of the close of trading on Tuesday.
You can view the full
or get investment ideas from our
-- Written by a member of TheStreet Ratings Staff
It's Official: Action Alerts PLUS beats the S&P 500 with Dividends Reinvested! Cramer and Link were up 16.72% in 2012. Were you? See what they are trading for 14-days FREE