NEW YORK ( TheStreet) -- Hawthorn (Nasdaq: HWBK) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself. Highlights from the ratings report include:
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 32.03%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 2343.68% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The gross profit margin for HAWTHORN BANCSHARES INC is currently lower than what is desirable, coming in at 32.80%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -36.20% is significantly below 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. Compared to other companies in the Commercial Banks industry and the overall market, HAWTHORN BANCSHARES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- 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 Commercial Banks industry. The net income has significantly decreased by 893.3% when compared to the same quarter one year ago, falling from $0.79 million to -$6.25 million.
- HAWTHORN BANCSHARES INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, HAWTHORN BANCSHARES INC swung to a loss, reporting -$1.24 versus $0.68 in the prior year.