NEW YORK ( TheStreet) -- Chase Corporation (AMEX: CCF) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • CCF's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CCF has a quick ratio of 1.57, which demonstrates the ability of the company to cover short-term liquidity needs.
  • CHASE CORP's earnings per share declined by 21.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CHASE CORP increased its bottom line by earning $1.17 versus $0.59 in the prior year. This year, the market expects an improvement in earnings ($1.27 versus $1.17).
  • 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 Chemicals industry. The net income has significantly decreased by 32.6% when compared to the same quarter one year ago, falling from $4.40 million to $2.97 million.
  • Net operating cash flow has decreased to $5.17 million or 26.08% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

Chase Corporation engages in the manufacture and sale of specialty tapes, laminates, sealants, and coatings for various applications worldwide. The company has a P/E ratio of 9.9, above the average industrial industry P/E ratio of 9.2 and below the S&P 500 P/E ratio of 17.7. Chase has a market cap of $106.9 million and is part of the industrial goods sector and industrial industry. Shares are down 26.9% year to date as of the close of trading on Thursday.

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