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, generally weak debt management, disappointing return on equity, weak operating cash flow and feeble growth in its earnings per share.
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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 225.6% when compared to the same quarter one year ago, falling from $37.22 million to -$46.75 million.
- The debt-to-equity ratio is very high at 3.34 and currently higher than the industry average, implying that there is very poor management of debt levels within the company.
- 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 Real Estate Investment Trusts (REITs) industry and the overall market, NORTHSTAR REALTY FINANCE CP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $13.55 million or 28.94% when compared to the same quarter last year. Despite a decrease in cash flow NORTHSTAR REALTY FINANCE CP is still fairing well by exceeding its industry average cash flow growth rate of -39.82%.
- NORTHSTAR REALTY FINANCE CP has exprienced 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, NORTHSTAR REALTY FINANCE CP reported poor results of -$5.10 versus -$2.11 in the prior year. This year, the market expects an improvement in earnings ($0.24 versus -$5.10).
Operates as an internally-managed commercial real estate company that makes fixed income, structured finance and net lease investments in real estate assets. The company intends to qualify as a REIT. Northstar Realty Finance has a market cap of $341.6 million and is part of the
industry. Shares are down 23.6% year to date as of the close of trading on Thursday.
You can view the full
or get investment ideas from our