NEW YORK (TheStreet) -- Shares of Revolution Lighting Technologies (RVLT) are up 29.69% to $1.66 on heavy trading volume after the global provider of advanced LED lighting solutions announced today that it has entered into a strategic distribution partnership with Fastenal Co. (FAST) - Get Fastenal Company Report .
Minnesota-based Fastenal is one of the largest Maintenance, Repair and Operations (MRO) suppliers in the U.S. Under the terms, through its U.S. stores and distribution centers, Fastenal will stock and make available a variety of Revolution Lighting Technologies' LED products.
"Revolution Lighting gains a market leading partner that will facilitate our entry into the large MRO marketplace," the company said.
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About 1.93 million shares of Revolution Lighting Technologies changed hands by 11:42 a.m. in New York, compared to the average of 595,036 shares.
Separately, TheStreet Ratings team rates REVOLUTION LIGHTING TECHNLGS as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate REVOLUTION LIGHTING TECHNLGS (RVLT) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly decreased to -$7.83 million or 17684.09% 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 REVOLUTION LIGHTING TECHNLGS is currently lower than what is desirable, coming in at 31.85%. Regardless of RVLT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, RVLT's net profit margin of -5.22% significantly underperformed when compared to the industry average.
- RVLT's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 60.13%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- 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 Electrical Equipment industry and the overall market, REVOLUTION LIGHTING TECHNLGS's return on equity significantly trails that of both the industry average and the S&P 500.
- RVLT's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.02, which illustrates the ability to avoid short-term cash problems.
- You can view the full analysis from the report here: RVLT Ratings Report