NEW YORK ( TheStreet) -- Center Bancorp (Nasdaq: CNBC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall. Highlights from the ratings report include:
- CENTER BANCORP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CENTER BANCORP INC increased its bottom line by earning $0.43 versus $0.25 in the prior year. This year, the market expects an improvement in earnings ($0.77 versus $0.43).
- 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 78.0% when compared to the same quarter one year prior, rising from $2.01 million to $3.58 million.
- Powered by its strong earnings growth of 61.53% and other important driving factors, this stock has surged by 28.43% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- 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 Commercial Banks industry and the overall market on the basis of return on equity, CENTER BANCORP INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Net operating cash flow has decreased to $3.05 million or 15.76% when compared to the same quarter last year. Despite a decrease in cash flow CENTER BANCORP INC is still fairing well by exceeding its industry average cash flow growth rate of -37.48%.