Editor's Note: This rating change did not take into account Heckmann's latest quarterly earnings -- an updated rating will be posted in the near future.

NEW YORK ( TheStreet) -- Heckmann (NYSE: HEK) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • HECKMANN CORP 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, HECKMANN CORP reported poor results of -$3.61 versus -$0.19 in the prior year. This year, the market expects an improvement in earnings ($0.22 versus -$3.61).
  • HEK, with its decline in revenue, underperformed when compared the industry average of 20.2%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Beverages industry and the overall market, HECKMANN CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • HEK has underperformed the S&P 500 Index, declining 6.86% from its price level of one year ago. 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.
  • Net operating cash flow has significantly decreased to -$5.38 million or 2790.00% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Heckmann Corporation, a holding company, acquires or makes investments in various businesses. The company, through its subsidiary, China Water & Drinks, Inc., engages in the manufacture and sale of bottled water products in the People's Republic of China. Heckmann has a market cap of $626.2 million and is part of the financial sector and financial services industry. Shares are up 10.7% year to date as of the close of trading on Monday.

You can view the full Heckmann Ratings Report or get investment ideas from our investment research center.

If you liked this article you might like

'Mad Money' Lightning Round: Don't Sell Heckmann

Cramer's 'Mad Money' Recap: Next Week's Game Plan

Cramer's 'Mad Money' Recap: Next Week's Game Plan (Correct)

Cramer Quick Take: My Top Rail Stocks

What Heckmann Reveals About the Domestic Energy Picture