NEW YORK (TheStreet) -- Shares of SunOpta (STKL) - Get Report were falling 8.5% to $5.70 on heavy trading volume after the food and mineral company priced the 16.67 million shares in its public offering.
SunOpta priced the 16.67 million shares in the public offering at $6 a share. The company granted the underwriters a 30-day option to buy an additional 2,500,500 shares at the came offering price.
The offering is expected to close on September 30.
SunOpta said it will use the proceeds from the offering to fund a portion of its purchase price to acquire Sunrise Holdings (Delaware), the parent company of frozen fruit company Sunrise Growers.
About 5 million shares of SunOpta were traded by 10:45 a.m. Friday, well above the company's average trading volume of about 464,000 shares a day.
TheStreet Ratings team rates SUNOPTA INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate SUNOPTA INC (STKL) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SUNOPTA INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SUNOPTA INC turned its bottom line around by earning $0.17 versus -$0.13 in the prior year. This year, the market expects an improvement in earnings ($0.30 versus $0.17).
- The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.48 is very weak and demonstrates a lack of ability to pay short-term obligations.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 8.4%. Since the same quarter one year prior, revenues slightly dropped by 6.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The gross profit margin for SUNOPTA INC is currently extremely low, coming in at 12.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.66% trails that of the industry average.
- Net operating cash flow has significantly decreased to -$5.28 million or 115.90% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: STKL