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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
Highlights from the ratings report include:
- YONG's very impressive revenue growth greatly exceeded the industry average of 3.9%. Since the same quarter one year prior, revenues leaped by 95.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- YONG's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.10, which clearly demonstrates the ability to cover short-term cash needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Chemicals industry and the overall market on the basis of return on equity, YONGYE INTERNATIONAL INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- YONG's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 50.04%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
Yongye International, Inc., together with its subsidiaries, engages in the research, development, manufacture, and sale of fulvic acid based liquid and powder nutrient compounds for plants and animals, which are used in the agriculture industry in the People's Republic of China. The company has a P/E ratio of 2.1, below the average chemicals industry P/E ratio of 2.6 and below the S&P 500 P/E ratio of 17.7. Yongye International has a market cap of $216.8 million and is part of the
industry. Shares are down 10% year to date as of the close of trading on Friday.
You can view the full
or get investment ideas from our
-- Written by a member of TheStreet Ratings Staff