NEW YORK ( TheStreet) -- Revett Minerals (AMEX: RVM) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and poor profit margins. 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 Metals & Mining industry. The net income has significantly decreased by 411.8% when compared to the same quarter one year ago, falling from $0.91 million to -$2.85 million.
- The gross profit margin for REVETT MINERALS INC is currently lower than what is desirable, coming in at 31.30%. Regardless of RVM's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, RVM's net profit margin of -22.30% significantly underperformed when compared to the industry average.
- 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 Metals & Mining industry and the overall market on the basis of return on equity, REVETT MINERALS INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- REVETT MINERALS INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, REVETT MINERALS INC turned its bottom line around by earning $0.12 versus -$0.20 in the prior year.
- Compared to its closing price of one year ago, RVM's share price has jumped by 188.88%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in RVM do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.