NEW YORK ( TheStreet) -- Great Panther Silver (AMEX: GPL) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and disappointing return on equity. Highlights from the ratings report include:
- GREAT PANTHER SILVER LTD reported significant earnings per share improvement 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 two years. During the past fiscal year, GREAT PANTHER SILVER LTD turned its bottom line around by earning $0.04 versus -$0.01 in the prior year.
- GPL's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 9.35, which clearly demonstrates the ability to cover short-term cash needs.
- Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 96.58% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- 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 Metals & Mining industry and the overall market on the basis of return on equity, GREAT PANTHER SILVER LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Net operating cash flow has decreased to $2.15 million or 43.63% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.