Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model
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, weak operating cash flow, poor profit margins and feeble growth in its earnings per share.
- 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 Paper & Forest Products industry. The net income has significantly decreased by 121.7% when compared to the same quarter one year ago, falling from $23.00 million to -$5.00 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Paper & Forest Products industry and the overall market, RESOLUTE FOREST PRODUCTS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$20.00 million or 135.08% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The gross profit margin for RESOLUTE FOREST PRODUCTS INC is currently extremely low, coming in at 10.50%. Regardless of RFP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -0.46% trails the industry average.
- RESOLUTE FOREST PRODUCTS INC 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, RESOLUTE FOREST PRODUCTS INC swung to a loss, reporting -$0.03 versus $0.42 in the prior year. This year, the market expects an improvement in earnings ($0.89 versus -$0.03).
Resolute Forest Products Inc. manufactures and sells newsprint, commercial printing papers, market pulp, and wood products. Resolute Forest has a market cap of $1.48 billion and is part of the consumer goods sector and consumer non-durables industry. Shares are up 17.9% year to date as of the close of trading on Tuesday.
You can view the full
or get investment ideas from our
-- Written by a member of TheStreet Ratings Staff
Exclusive Offer: Jim Cramer's 'go-to' small/mid-cap guru Bryan Ashenberg only buys stocks he thinks could return 50-100% See his top picks for 14-days FREE