NEW YORK ( TheStreet) -- Central Bancorp (Nasdaq: CEBK) 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 and disappointing return on equity.

Highlights from the ratings report include:
  • CENTRAL BANCORP INC/MA 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. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, CENTRAL BANCORP INC/MA reported lower earnings of $0.69 versus $0.91 in the prior year.
  • 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 Thrifts & Mortgage Finance industry. The net income has significantly decreased by 68.1% when compared to the same quarter one year ago, falling from $0.74 million to $0.24 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, CENTRAL BANCORP INC/MA underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 13.3%. Since the same quarter one year prior, revenues fell by 12.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has slightly increased to $1.46 million or 6.41% when compared to the same quarter last year. Despite an increase in cash flow of 6.41%, CENTRAL BANCORP INC/MA is still growing at a significantly lower rate than the industry average of 650.68%.

Central Bancorp, Inc. operates as the holding company for Central Co-operative Bank, which provides a range of banking products and services in the northwestern suburbs of Boston, Massachusetts. The company has a P/E ratio of 48.3, equal to the average banking industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Central has a market cap of $29.2 million and is part of the financial sector and banking industry. Shares are up 27% year to date as of the close of trading on Wednesday.

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