NEW YORK ( TheStreet) -- Frozen Food Express Industries (Nasdaq: FFEX) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins and weak operating cash flow. Highlights from the ratings report include:
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Road & Rail industry and the overall market, FROZEN FOOD EXPRESS INDS's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for FROZEN FOOD EXPRESS INDS is currently extremely low, coming in at 0.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.30% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$2.31 million or 63.99% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- FROZEN FOOD EXPRESS INDS has improved earnings per share by 26.9% 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. During the past fiscal year, FROZEN FOOD EXPRESS INDS continued to lose money by earning -$0.70 versus -$0.96 in the prior year.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Road & Rail industry average. The net income increased by 25.3% when compared to the same quarter one year prior, rising from -$4.43 million to -$3.31 million.