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 buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and notable return on equity. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and unimpressive growth in net income.
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Highlights from the ratings report include:
- PKOH's revenue growth has slightly outpaced the industry average of 3.3%. Since the same quarter one year prior, revenues rose by 12.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, PKOH's share price has jumped by 53.68%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- PARK OHIO HOLDINGS CORP's earnings per share declined by 6.8% in the most recent quarter compared to 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, PARK OHIO HOLDINGS CORP increased its bottom line by earning $3.31 versus $2.82 in the prior year. This year, the market expects an improvement in earnings ($4.60 versus $3.31).
- The gross profit margin for PARK OHIO HOLDINGS CORP is rather low; currently it is at 19.29%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.17% trails that of the industry average.
- Net operating cash flow has significantly decreased to $4.00 million or 75.60% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Park-Ohio Holdings Corp., through its subsidiaries, operates as an industrial supply chain logistics and diversified manufacturing company in the United States, Asia, Canada, Mexico, and Europe. Park-Ohio has a market cap of $715.6 million and is part of the services sector and wholesale industry. Shares are up 3.8% year to date as of the close of trading on Wednesday.
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