NEW YORK ( TheStreet) -- Core-Mark Holding Company (Nasdaq: CORE) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The gross profit margin for CORE MARK HOLDING CO INC is currently extremely low, coming in at 3.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.10% trails that of the industry average.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Distributors industry and the overall market, CORE MARK HOLDING CO INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • CORE's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 17.1%. Since the same quarter one year prior, revenues rose by 10.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.

Core-Mark Holding Company, Inc., together with its subsidiaries, engages in the business of distributing packaged consumer products to convenience retail stores in the United States and Canada. The company has a P/E ratio of 22.1, equal to the average wholesale industry P/E ratio and above the S&P 500 P/E ratio of 16.2. Core-Mark Holding has a market cap of $386.3 million and is part of the services sector and wholesale industry. Shares are down 4.9% year to date as of the close of trading on Friday.

You can view the full Core-Mark Holding Ratings Report or get investment ideas from our investment research center.
null