NEW YORK ( TheStreet) -- Sucampo Pharmaceuticals (Nasdaq: SCMP) 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, deteriorating net income, disappointing return on equity and generally weak debt management. Highlights from the ratings report include:
- This stock has managed to rise its share value by 7.88% over the past twelve months. Regardless of the rise in share value over the previous year, we feel that the risks involved in investing in this stock do not compensate for any future upside potential.
- Currently the debt-to-equity ratio of 1.56 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 2.62, which shows the ability to cover short-term cash needs.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Pharmaceuticals industry and the overall market, SUCAMPO PHARMACEUTICALS INC's return on equity significantly trails 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 Pharmaceuticals industry. The net income has significantly decreased by 4671.9% when compared to the same quarter one year ago, falling from -$0.19 million to -$9.02 million.
- SUCAMPO PHARMACEUTICALS INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, SUCAMPO PHARMACEUTICALS INC reported poor results of -$0.07 versus -$0.02 in the prior year.