NEW YORK ( TheStreet) -- Canterbury Park Holding Corporation (Nasdaq: CPHC) 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 and poor profit margins. Highlights from the ratings report include:
- CANTERBURY PARK HOLDING CORP reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, CANTERBURY PARK HOLDING CORP swung to a loss, reporting -$0.24 versus $0.02 in the prior year.
- The gross profit margin for CANTERBURY PARK HOLDING CORP is currently extremely low, coming in at 3.90%. Regardless of CPHC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CPHC's net profit margin of -3.00% significantly underperformed when compared to the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, CANTERBURY PARK HOLDING CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- The net income growth from the same quarter one year ago has exceeded that of the Hotels, Restaurants & Leisure industry average, but is less than that of the S&P 500. The net income increased by 8.4% when compared to the same quarter one year prior, going from -$0.38 million to -$0.35 million.