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NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and generally higher debt management risk.
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Highlights from the ratings report include:
- LIBBEY INC 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. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, LIBBEY INC increased its bottom line by earning $1.29 versus $0.31 in the prior year. This year, the market expects an improvement in earnings ($2.31 versus $1.29).
- Net operating cash flow has slightly increased to -$12.37 million or 2.45% when compared to the same quarter last year. Despite an increase in cash flow, LIBBEY INC's cash flow growth rate is still lower than the industry average growth rate of 38.08%.
- LBY, with its decline in revenue, underperformed when compared the industry average of 11.0%. Since the same quarter one year prior, revenues slightly dropped by 1.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The debt-to-equity ratio is very high at 3.18 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, LBY has a quick ratio of 0.69, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- 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 Household Durables industry. The net income has significantly decreased by 270.1% when compared to the same quarter one year ago, falling from $1.99 million to -$3.38 million.
Libbey Inc. manufactures and markets glass tableware products worldwide. Libbey has a market cap of $484.3 million and is part of the consumer goods sector and consumer durables industry. Shares are up 8.3% year to date as of the close of trading on Wednesday.
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