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 upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins.
- 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:
- RENTECH INC has improved earnings per share by 45.5% 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, RENTECH INC turned its bottom line around by earning $0.00 versus -$0.06 in the prior year. This year, the market expects an increase in earnings to $0.05 from $0.00.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 40.8% when compared to the same quarter one year prior, rising from -$24.53 million to -$14.53 million.
- Compared to its price level of one year ago, RTK is down 31.25% to its most recent closing price of 1.76. Looking ahead, our view is that this company's fundamentals will not have much impact either way, allowing the stock to generally move up or down based on the push and pull of the broad market.
- The gross profit margin for RENTECH INC is currently extremely low, coming in at 5.08%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -18.33% is significantly below that of the industry average.
- The debt-to-equity ratio is very high at 2.67 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
Rentech, Inc., through its subsidiaries, engages in the manufacture and sale of natural-gas based nitrogen fertilizer products in the United States and Brazil. Rentech has a market cap of $453.6 million and is part of the basic materials sector and chemicals industry. Shares are up 14.3% year to date as of the close of trading on Monday.
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.