NEW YORK ( TheStreet) -- Andersons (Nasdaq: ANDE) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including poor profit margins, a generally disappointing performance in the stock itself and generally poor debt management. Highlights from the ratings report include:
- ANDE's very impressive revenue growth greatly exceeded the industry average of 1.7%. Since the same quarter one year prior, revenues leaped by 65.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ANDERSONS INC 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ANDERSONS INC increased its bottom line by earning $3.49 versus $2.09 in the prior year. This year, the market expects an improvement in earnings ($4.56 versus $3.49).
- 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 Food & Staples Retailing industry and the overall market on the basis of return on equity, ANDERSONS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- ANDE's debt-to-equity ratio of 0.98 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.43 is very low and demonstrates very weak liquidity.
- The gross profit margin for ANDERSONS INC is currently extremely low, coming in at 9.90%. 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 3.40% is above that of the industry average.