NEW YORK ( TheStreet) -- Abington Bancorp (Nasdaq: ABBC) 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, notable return on equity and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive. Highlights from the ratings report include:
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Thrifts & Mortgage Finance industry average, but is greater than that of the S&P 500. The net income increased by 197.6% when compared to the same quarter one year prior, rising from -$1.99 million to $1.94 million.
- Powered by its strong earnings growth of 190.00% and other important driving factors, this stock has surged by 47.44% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- ABINGTON BANCORP 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ABINGTON BANCORP INC turned its bottom line around by earning $0.38 versus -$0.38 in the prior year. For the next year, the market is expecting a contraction of 7.9% in earnings ($0.35 versus $0.38).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, ABINGTON BANCORP INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- The gross profit margin for ABINGTON BANCORP INC is rather high; currently it is at 66.70%. It has increased significantly from the same period last year. Along with this, the net profit margin of 14.70% is above that of the industry average.