Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. TheStreet Ratings quantitative algorithm evaluates over 4,300 stocks on a daily basis by 32 different data factors and assigns a unique buy, sell, or hold recommendation on each stock. Click here to learn more.
NEW YORK (TheStreet) -- Stock Building Supply (STCK) 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 STOCK BUILDING SUPPLY (STCK) a SELL. This is driven by a number of negative factors, 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 generally disappointing historical performance in the stock itself and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- STCK has underperformed the S&P 500 Index, declining 8.95% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- The gross profit margin for STOCK BUILDING SUPPLY is rather low; currently it is at 24.13%. Regardless of STCK'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 1.40% trails the industry average.
- The debt-to-equity ratio is somewhat low, currently at 0.65, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.99 is somewhat weak and could be cause for future problems.
- In comparison to the other companies in the Trading Companies & Distributors industry and the overall market, STOCK BUILDING SUPPLY's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- Net operating cash flow has significantly increased by 302.02% to $16.69 million when compared to the same quarter last year. In addition, STOCK BUILDING SUPPLY has also vastly surpassed the industry average cash flow growth rate of 6.07%.
- You can view the full analysis from the report here: STCK Ratings Report