NEW YORK (
-- Yuhe International
) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- YUHE INTERNATIONAL INC reported significant earnings per share improvement 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, YUHE INTERNATIONAL INC swung to a loss, reporting -$1.67 versus $0.81 in the prior year. This year, the market expects an improvement in earnings ($1.78 versus -$1.67).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Food Products industry average, but is greater than that of the S&P 500. The net income increased by 107.3% when compared to the same quarter one year prior, rising from $2.93 million to $6.07 million.
- YUII'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 75.66%, 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.
- The gross profit margin for YUHE INTERNATIONAL INC is currently lower than what is desirable, coming in at 30.50%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 22.60% significantly trails the industry average.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Food Products industry and the overall market, YUHE INTERNATIONAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
Yuhe International, Inc. engages in the supply of day-old chickens raised for meat production or broilers in the People's Republic of China. The company purchases baby parent breeding stocks from primary breeder farms, raises them for hatching eggs, and sells live day-old broilers. The company has a P/E ratio of 3.2, below the S&P 500 P/E ratio of 17.7. Yuhe International has a market cap of $82.6 million and is part of the
industry. Shares are down 78.1% year to date as of the close of trading on Friday.
You can view the full
or get investment ideas from our