NEW YORK ( TheStreet) -- Haynes International (Nasdaq: HAYN) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$0.38 million or 196.06% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for HAYNES INTERNATIONAL INC is rather low; currently it is at 19.50%. Regardless of HAYN's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, HAYN's net profit margin of 4.90% is significantly lower than the same period one year prior.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 508.7% when compared to the same quarter one year prior, rising from -$1.29 million to $5.26 million.
  • HAYNES INTERNATIONAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, HAYNES INTERNATIONAL INC turned its bottom line around by earning $0.72 versus -$4.36 in the prior year. This year, the market expects an improvement in earnings ($2.34 versus $0.72).

Haynes International Inc. develops, manufactures, markets, and distributes high-performance nickel-and cobalt-based alloys in sheet, coil, and plate forms for use by the manufacturers of various equipments worldwide. The company has a P/E ratio of 252.1, above the average metals & mining industry P/E ratio of 37.7 and above the S&P 500 P/E ratio of 16.1. Haynes International has a market cap of $583.2 million and is part of the basic materials sector and metals & mining industry. Shares are up 14.6% year to date as of the close of trading on Monday.

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