NEW YORK ( TheStreet) -- Retail Opportunity Investments Corp (Nasdaq: ROIC) 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 solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:
  • ROIC's very impressive revenue growth greatly exceeded the industry average of 11.7%. Since the same quarter one year prior, revenues leaped by 282.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ROIC's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, RETAIL OPPORTUNITY INVTS CP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for RETAIL OPPORTUNITY INVTS CP is currently extremely low, coming in at 14.50%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, ROIC's net profit margin of 5.70% is significantly lower than the same period one year prior.

Retail Opportunity Investments Corp. engages in investing in, acquiring, owning, and managing commercial real estate in the United States. Its portfolio of retail properties include community and neighborhood shopping centers anchored by national or regional supermarkets and drugstores. The company has a P/E ratio of 49.1, below the average real estate industry P/E ratio of 60 and above the S&P 500 P/E ratio of 17.7. Retail Opportunity Investments has a market cap of $454.4 million and is part of the financial sector and real estate industry. Shares are up 4.3% year to date as of the close of trading on Tuesday.

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