NEW YORK ( TheStreet) -- Amcon Distributing Company (AMEX: DIT) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, attractive valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow. Highlights from the ratings report include:
- Net operating cash flow has significantly decreased to -$17.05 million or 706.33% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The gross profit margin for AMCON DISTRIBUTING CO is currently extremely low, coming in at 10.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.00% trails that of the industry average.
- AMCON DISTRIBUTING CO's earnings per share declined by 35.7% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, AMCON DISTRIBUTING CO increased its bottom line by earning $11.98 versus $11.05 in the prior year.
- Compared to its closing price of one year ago, DIT's share price has jumped by 34.61%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.