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 buy 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 compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.
- ACTIVE STOCK TRADERS: Check out TheStreet's special offer for Real Money, headlined by Jim Cramer, now!
Highlights from the ratings report include:
- Powered by its strong earnings growth of 7300.00% and other important driving factors, this stock has surged by 40.44% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
- RESOURCE AMERICA INC 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 two years. During the past fiscal year, RESOURCE AMERICA INC continued to lose money by earning -$0.30 versus -$0.73 in the prior year.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Diversified Financial Services industry and the overall market on the basis of return on equity, RESOURCE AMERICA INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The gross profit margin for RESOURCE AMERICA INC is rather low; currently it is at 23.80%. It has decreased significantly from the same period last year. Despite the weak results of the gross profit margin, the net profit margin of 219.30% has significantly outperformed against the industry average.
- Net operating cash flow has significantly decreased to -$2.68 million or 208.28% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Resource America, Inc. operates as an asset management company. The company, through its subsidiaries, operates in three segments: Financial Fund Management; Real Estate; and Equipment Finance. The company has a P/E ratio of 5.3, equal to the average financial services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Resource America Inc. CL A has a market cap of $123.1 million and is part of the
industry. Shares are up 35.6% year to date as of the close of trading on Friday.
You can view the full
or get investment ideas from our
-- Written by a member of TheStreet Ratings Staff