NEW YORK (TheStreet) -- Shares of Forward Industries (FORD) - Get Forward Industries Inc. Report were gaining 39.4% to $1.45 on heavy trading volume Friday, after the specialty and promotional products manufacturer reported its fiscal third quarter results.

About 4.2 million shares of Forward Industries were traded by 2:44 p.m. Friday, well above the company's average trading volume of about 178,000 shares a day.

Forward Industries reported its fiscal third quarter results on Tuesday. The company reported earnings of 6 cents a share for the fiscal third quarter, up from break-even warnings in the year-ago quarter. Revenue fell to $7.23 million for the quarter from $9.06 million in the year-ago quarter.

There were no analyst estimates available for the company.

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Forward Industries is a West Palm Beach, FL-based company that designs and distributes cases and accessories for mobile devices.

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 few notable 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 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.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 49.62%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 100.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • You can view the full analysis from the report here: FORD Ratings Report