NEW YORK ( TheStreet) -- TRUSTCO BANK CORP N Y (Nasdaq: TRST) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Thrifts & Mortgage Finance industry. The net income has decreased by 18.6% when compared to the same quarter one year ago, dropping from $8.48 million to $6.90 million.
- In its most recent trading session, TRST has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- 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 Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, TRUSTCO BANK CORP/NY has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Net operating cash flow has significantly increased by 1911.20% to $15.20 million when compared to the same quarter last year. In addition, TRUSTCO BANK CORP/NY has also vastly surpassed the industry average cash flow growth rate of 732.47%.
- The gross profit margin for TRUSTCO BANK CORP/NY is currently very high, coming in at 70.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.60% is above that of the industry average.