NEW YORK (TheStreet) -- Shares of Forward Industries (FORD) - Get Forward Industries Inc. Report were gaining 34.4% to $1.72 on heavy trading volume Wednesday, continuing gains from Tuesday when the mobile device cases maker signed an extension with BayerHealthcare (BAYRY) - Get Bayer AG Report.
About 8.8 million shares of Forward Industries were traded by 10:43 a.m. Wednesday, well above the company's average trading volume of about 445,000 shares a day.
On Tuesday, Forward Industries said it signed an extension with Bayer to continuing supplying custom carrying cases for its diabetic products through the end of 2018. The current agreement between the two companies was due to expire at the end of 2016.
"Getting this supplier extension from one of the major players in the industry is testament to our ability to supply quality products on a timely basis," Forward Industries CEO Terry Wise said in a statement. "Additionally, our ability to meet complex compliance requirements in a highly regulated industry gives us a significant advantage over our competitors."
TheStreet Ratings team rates FORWARD INDUSTRIES INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate FORWARD INDUSTRIES INC (FORD) a SELL. This is driven by a number of negative factors, 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 deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 Textiles, Apparel & Luxury Goods industry. The net income has significantly decreased by 127.5% when compared to the same quarter one year ago, falling from -$0.30 million to -$0.69 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 Textiles, Apparel & Luxury Goods industry and the overall market, FORWARD INDUSTRIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for FORWARD INDUSTRIES INC is rather low; currently it is at 18.82%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -9.47% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$0.98 million or 228.53% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of FORWARD INDUSTRIES INC has not done very well: it is down 17.19% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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: FORD Ratings Report