NEW YORK (
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and expanding profit margins. However, as a counter to these strengths, we find that the company has not been very careful in the management of its balance sheet.
Highlights from the ratings report include:
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- NORTHSTAR REALTY FINANCE CP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, NORTHSTAR REALTY FINANCE CP continued to lose money by earning -$3.23 versus -$5.13 in the prior year. This year, the market expects an improvement in earnings ($1.02 versus -$3.23).
- The gross profit margin for NORTHSTAR REALTY FINANCE CP is rather high; currently it is at 54.80%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -61.20% is in-line with the industry average.
- 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. 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.
- The debt-to-equity ratio is very high at 3.48 and currently higher than the industry average, implying that there is very poor management of debt levels within the company.
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 $489.5 million and is part of the
industry. Shares are up 19.5% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet RatingsStaff