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 hold to sell. 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 high debt management risk.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
Highlights from the ratings report include:
- 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 Metals & Mining industry. The net income has significantly decreased by 521.4% when compared to the same quarter one year ago, falling from $4.20 million to -$17.70 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 Metals & Mining industry and the overall market, NORANDA ALUMINUM HOLDING CP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for NORANDA ALUMINUM HOLDING CP is currently extremely low, coming in at 12.61%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -5.65% is significantly below that of the industry average.
- Net operating cash flow has decreased to $22.00 million or 32.72% when compared to the same quarter last year. Despite a decrease in cash flow of 32.72%, NORANDA ALUMINUM HOLDING CP is in line with the industry average cash flow growth rate of -34.73%.
- The debt-to-equity ratio is very high at 4.66 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, NOR's quick ratio is somewhat strong at 1.03, demonstrating the ability to handle short-term liquidity needs.
Noranda Aluminum Holding Corporation engages in the production and sale of primary aluminum products and rolled aluminum coils in the United States. Its Bauxite segment mines, produces, and sells bauxite used for alumina production. Noranda Aluminum has a market cap of $254.7 million and is part of the basic materials sector and metals & mining industry. Shares are up 13.7% year to date as of the close of trading on Friday.
You can view the full
or get investment ideas from our
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.