NEW YORK ( TheStreet) -- Tri-Tech (Nasdaq: TRIT) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, disappointing return on equity and weak operating cash flow. Highlights from the ratings report include:
- TRIT has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.61, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has decreased to -$3.32 million or 25.89% when compared to the same quarter last year. Despite a decrease in cash flow of 25.89%, TRI-TECH HOLDING INC is still significantly exceeding the industry average of -80.22%.
- 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. When compared to other companies in the Water Utilities industry and the overall market, TRI-TECH HOLDING INC's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- TRIT has underperformed the S&P 500 Index, declining 8.65% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.