NEW YORK ( TheStreet) -- Newport Bancorp (Nasdaq: NFSB) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins, notable return on equity and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • 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 Thrifts & Mortgage Finance industry. The net income has decreased by 12.4% when compared to the same quarter one year ago, dropping from $0.50 million to $0.44 million.
  • NEWPORT BANCORP INC's earnings per share declined by 7.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NEWPORT BANCORP INC increased its bottom line by earning $0.53 versus $0.19 in the prior year. For the next year, the market is expecting a contraction of 9.4% in earnings ($0.48 versus $0.53).
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The gross profit margin for NEWPORT BANCORP INC is rather high; currently it is at 69.40%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 7.30% is above that of the industry average.

Newport Bancorp, Inc. operates as the holding company for Newport Federal Savings Bank, which provides various financial services to individuals and small businesses. The company has a P/E ratio of 24.2, equal to the average banking industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Newport has a market cap of $48.9 million and is part of the financial sector and banking industry. Shares are up 14.6% year to date as of the close of trading on Monday.

You can view the full Newport Ratings Report or get investment ideas from our investment research center.
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Newport Bancorp Inc. Stock Downgraded (NFSB)

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