NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, weak operating cash flow and poor profit margins.
- ACTIVE STOCK TRADERS: Check out TheStreet's special offer for Real Money, headlined by Jim Cramer, now!
Highlights from the ratings report include:
- TIE's revenue growth has slightly outpaced the industry average of 1.8%. Since the same quarter one year prior, revenues slightly increased by 9.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- TIE's debt-to-equity ratio is very low at 0.03 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 1.22, which illustrates the ability to avoid short-term cash problems.
- TITANIUM METALS CORP's earnings per share declined by 6.3% in the most recent quarter compared to 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, TITANIUM METALS CORP increased its bottom line by earning $0.64 versus $0.45 in the prior year. This year, the market expects an improvement in earnings ($0.68 versus $0.64).
- Net operating cash flow has significantly decreased to -$33.50 million or 440.32% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Looking at the price performance of TIE's shares over the past 12 months, there is not much good news to report: the stock is down 37.17%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, TIE is still more expensive than most of the other companies in its industry.
Titanium Metals Corporation produces and sells titanium melted and mill products. The company has a P/E ratio of 17.2, equal to the average metals & mining industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Titanium has a market cap of $1.9 billion and is part of the
industry. Shares are down 24.5% year to date as of the close of trading on Monday.
You can view the full
or get investment ideas from our
-- Written by a member of TheStreet Ratings Staff
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.