NEW YORK ( TheStreet) -- China Ceramics (Nasdaq: CCCL) 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 and generally disappointing historical performance in the stock itself. Highlights from the ratings report include:
- CCCL's debt-to-equity ratio is very low at 0.10 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.28, which illustrates the ability to avoid short-term cash problems.
- The net income growth from the same quarter one year ago has significantly exceeded that of the Building Products industry average, but is less than that of the S&P 500. The net income increased by 24.4% when compared to the same quarter one year prior, going from $6.63 million to $8.25 million.
- The gross profit margin for CHINA CERAMICS CO LTD is currently lower than what is desirable, coming in at 33.90%. Regardless of CCCL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CCCL's net profit margin of 17.50% significantly outperformed against the industry.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 25.65%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 30.76% 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.
- CHINA CERAMICS CO LTD's earnings per share declined by 30.8% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, CHINA CERAMICS CO LTD reported lower earnings of $3.19 versus $3.46 in the prior year. For the next year, the market is expecting a contraction of 24.4% in earnings ($2.41 versus $3.19).