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NEW YORK (

TheStreet

)

-- Saga Communications

(AMEX:

SGA

) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

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Highlights from the ratings report include:

  • The current debt-to-equity ratio, 0.42, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 2.67, which clearly demonstrates the ability to cover short-term cash needs.
  • SGA, with its decline in revenue, slightly underperformed the industry average of 4.0%. Since the same quarter one year prior, revenues slightly dropped by 5.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has decreased to $7.24 million or 23.23% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • 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. When compared to other companies in the Media industry and the overall market, SAGA COMMUNICATIONS's return on equity is below that of both the industry average and the S&P 500.

Saga Communications, Inc., a broadcast company, acquires, develops, and operates broadcast properties in the United States. It operates in two segments, Radio and Television. Saga has a market cap of $190.2 million and is part of the services sector and media industry. Shares are down 23.2% year to date as of the close of trading on Wednesday.

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