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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 (

TheStreet

)

-- Landauer

(NYSE:

LDR

) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

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Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.4%. Since the same quarter one year prior, revenues slightly increased by 2.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 365.14% to $9.95 million when compared to the same quarter last year. In addition, LANDAUER INC has also vastly surpassed the industry average cash flow growth rate of -26.40%.
  • The gross profit margin for LANDAUER INC is rather high; currently it is at 62.04%. Regardless of LDR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LDR's net profit margin of 8.09% compares favorably to the industry average.
  • 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 Health Care Providers & Services industry. The net income has significantly decreased by 37.4% when compared to the same quarter one year ago, falling from $4.88 million to $3.05 million.
  • The share price of LANDAUER INC has not done very well: it is down 16.60% 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. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

Landauer, Inc., together with its subsidiaries, provides technical and analytical services, outsourced medical physics services, and radiology related medical products Worldwide. The company operates in three segments: Radiation Measurement, Medical Physics, and Medical Products. Landauer has a market cap of $469.1 million and is part of the technology sector and electronics industry. Shares are down 5.6% year to date as of the close of trading on Monday.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.