NEW YORK ( TheStreet) -- Winthrop Realty (NYSE: FUR) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, WINTHROP REALTY TRUST's return on equity is below 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 Real Estate Investment Trusts (REITs) industry. The net income has decreased by 18.8% when compared to the same quarter one year ago, dropping from $4.52 million to $3.67 million.
  • 42.20% is the gross profit margin for WINTHROP REALTY TRUST which we consider to be strong. Regardless of FUR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 19.00% trails the industry average.
  • The debt-to-equity ratio is somewhat low, currently at 0.69, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • FUR's very impressive revenue growth greatly exceeded the industry average of 11.8%. Since the same quarter one year prior, revenues leaped by 52.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.

Operates as a real estate investment trust, headquartered in Boston. As of Dec. 31, 2005, in addition to cash reserves and government securities, the trust primarily owned an office building, commonly referred to as Circle Tower, located in Indianapolis, IN and 16 triple-net lease properties. The company has a P/E ratio of 12.1, below the average real estate industry P/E ratio of 13.7 and below the S&P 500 P/E ratio of 17.7. Winthrop has a market cap of $351.3 million and is part of the financial sector and real estate industry. Shares are down 22.3% year to date as of the close of trading on Friday.

You can view the full Winthrop Ratings Report or get investment ideas from our investment research center.
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