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NEW YORK (TheStreet) -- Schmitt Industries Inc. (SMIT) - Get Schmitt Industries, Inc. Report has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D+.  TheStreet Ratings Team has this to say about their recommendation:

"We rate SCHMITT INDUSTRIES INC/OR (SMIT) a SELL. This is driven by multiple 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 area that we feel has been the company's primary weakness has been its disappointing return on equity."

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Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, SCHMITT INDUSTRIES INC/OR's return on equity significantly trails that of both the industry average and the S&P 500.
  • 49.33% is the gross profit margin for SCHMITT INDUSTRIES INC/OR which we consider to be strong. Regardless of SMIT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SMIT's net profit margin of -2.22% significantly underperformed when compared to the industry average.
  • SCHMITT INDUSTRIES INC/OR reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, SCHMITT INDUSTRIES INC/OR's EPS of -$0.17 remained unchanged from the prior years' EPS of -$0.17.
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Electronic Equipment, Instruments & Components industry average. The net income increased by 57.0% when compared to the same quarter one year prior, rising from -$0.16 million to -$0.07 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 1.2%. Since the same quarter one year prior, revenues slightly increased by 0.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • You can view the full analysis from the report here: SMIT Ratings Report

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