NEW YORK (
-- Winn-Dixie Stores
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Food & Staples Retailing industry and the overall market, WINN-DIXIE STORES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has declined marginally to $86.01 million or 1.99% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- WINN, with its decline in revenue, slightly underperformed the industry average of 0.5%. Since the same quarter one year prior, revenues slightly dropped by 0.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- WINN's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.37 is very weak and demonstrates a lack of ability to pay short-term obligations.
- The net income growth from the same quarter one year ago has exceeded that of the Food & Staples Retailing industry average, but is less than that of the S&P 500. The net income increased by 11.9% when compared to the same quarter one year prior, going from $20.88 million to $23.37 million.
Winn-Dixie Stores, Inc. operates as a food retailing company primarily under the Winn-Dixie banner. The company's stores offer grocery, meat, seafood, produce, deli, bakery, floral, health and beauty, and other general merchandise items. Winn-Dixie Stores has a market cap of $495.7 million and is part of the
industry. Shares are up 25.5% year to date as of the close of trading on Friday.
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