Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model
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 expanding profit margins, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.
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Highlights from the ratings report include:
- The gross profit margin for NATIONAL PENN BANCSHARES INC is currently very high, coming in at 81.40%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.40% is above that of the industry average.
- NATIONAL PENN BANCSHARES INC reported flat earnings per share in the most recent quarter. 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, NATIONAL PENN BANCSHARES INC increased its bottom line by earning $0.55 versus $0.11 in the prior year. This year, the market expects an improvement in earnings ($0.62 versus $0.55).
- Net operating cash flow has slightly increased to $41.36 million or 2.00% when compared to the same quarter last year. Despite an increase in cash flow, NATIONAL PENN BANCSHARES INC's cash flow growth rate is still lower than the industry average growth rate of 46.97%.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Commercial Banks industry and the overall market, NATIONAL PENN BANCSHARES INC's return on equity is below that of both the industry average and the S&P 500.
- The change in net income from the same quarter one year ago has exceeded that of the Commercial Banks industry average, but is less than that of the S&P 500. The net income has decreased by 3.3% when compared to the same quarter one year ago, dropping from $23.21 million to $22.45 million.
National Penn Bancshares, Inc. operates as the bank holding company for National Penn Bank that provides commercial banking products and services to residents and businesses primarily in eastern and central Pennsylvania. The company has a P/E ratio of 14.3, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. National Penn has a market cap of $1.33 billion and is part of the
industry. Shares are up 3.4% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet Ratings Staff