NEW YORK ( TheStreet) -- Hampden Bancorp (Nasdaq: HBNK) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we find that revenues have generally been declining.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 300.00% and other important driving factors, this stock has surged by 30.00% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, HAMPDEN BANCORP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • HAMPDEN BANCORP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HAMPDEN BANCORP INC swung to a loss, reporting -$0.04 versus $0.05 in the prior year. This year, the market expects an improvement in earnings ($0.38 versus -$0.04).
  • Net operating cash flow has significantly increased by 133.42% to $2.58 million when compared to the same quarter last year. In addition, HAMPDEN BANCORP INC has also vastly surpassed the industry average cash flow growth rate of -121.04%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 277.6% when compared to the same quarter one year prior, rising from -$0.14 million to $0.25 million.

Hampden Bancorp, Inc. operates as the holding company for Hampden Bank that provides various banking and financial services to individuals and small businesses in Hampden County, Massachusetts. The company has a P/E ratio of 62.4, above the average banking industry P/E ratio of 43.7 and above the S&P 500 P/E ratio of 17.7. Hampden has a market cap of $89.1 million and is part of the financial sector and banking industry. Shares are up 14.7% year to date as of the close of trading on Friday.

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