NEW YORK ( TheStreet) -- Charm Communications (Nasdaq: CHRM) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The gross profit margin for CHARM COMMUNICATIONS INC is currently lower than what is desirable, coming in at 27.60%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 16.00% is above that of the industry average.
  • CHRM has underperformed the S&P 500 Index, declining 17.75% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • CHARM COMMUNICATIONS INC has improved earnings per share by 23.8% in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($1.20 versus $0.94).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Media industry average. The net income increased by 30.1% when compared to the same quarter one year prior, rising from $8.30 million to $10.80 million.

Charm Communications Inc. operates as an advertising agency in China. The company offers a range of advertising agency services from planning and managing the advertising campaigns to creating and placing the advertisements. The company has a P/E ratio of seven, above the average media industry P/E ratio of 1.8 and below the S&P 500 P/E ratio of 17.7. Charm has a market cap of $272.7 million and is part of the services sector and media industry. Shares are down 29.3% year to date as of the close of trading on Thursday.

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