Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
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 solid stock price performance, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
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Highlights from the ratings report include:
- Compared to its closing price of one year ago, GLDC's share price has jumped by 26.57%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- Net operating cash flow has significantly increased by 1685.93% to $1.14 million when compared to the same quarter last year. In addition, GOLDEN ENTERPRISES has also vastly surpassed the industry average cash flow growth rate of -25.75%.
- The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.74 is somewhat weak and could be cause for future problems.
- GOLDEN ENTERPRISES 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 reported a trend of declining earnings per share over the past two years. During the past fiscal year, GOLDEN ENTERPRISES reported lower earnings of $0.10 versus $0.19 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 Food Products industry. The net income has significantly decreased by 218.6% when compared to the same quarter one year ago, falling from $0.47 million to -$0.56 million.
Golden Enterprises, Inc., through its subsidiary, Golden Flake Snack Foods, Inc., produces, markets, and distributes snack products. It offers salted snack items, such as potato chips, tortilla chips, corn chips, fried pork skins, baked and fried cheese curls, onion rings, and puff corn. Golden has a market cap of $52.3 million and is part of the consumer goods sector and food & beverage industry. Shares are up 8.3% year to date as of the close of trading on Thursday.
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