NEW YORK (
-- Edgen Group
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, notable return on equity and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and poor profit margins.
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Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 126.68% to $12.83 million when compared to the same quarter last year. In addition, EDGEN GROUP INC has also vastly surpassed the industry average cash flow growth rate of 55.66%.
- Compared to other companies in the Trading Companies & Distributors industry and the overall market, EDGEN GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
- 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 Trading Companies & Distributors industry. The net income has significantly decreased by 220.0% when compared to the same quarter one year ago, falling from $4.09 million to -$4.91 million.
- The debt-to-equity ratio is very high at 7.17 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, EDG maintains a poor quick ratio of 0.99, which illustrates the inability to avoid short-term cash problems.
Edgen Group Inc., through its subsidiaries, distributes specialty steel products to the energy sector. The company offers steel plates, sections, pipes and structural beams, columns, channels, valves, and welded pipes. Edgen Group Inc. was founded in 2011 and is based in Baton Rouge, Louisiana. Edgen Group has a market cap of $157.7 million and is part of the services sector and wholesale industry. Shares are up 19.7% year to date as of the close of trading on Thursday.
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