NEW YORK ( TheStreet) -- Bachoco Industries (NYSE: IBA) 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 and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins. Highlights from the ratings report include:
- IBA's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, IBA has a quick ratio of 2.10, which demonstrates the ability of the company to cover short-term liquidity needs.
- INDUSTRIAS BACHOCO SAB DE CV has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, INDUSTRIAS BACHOCO SAB DE CV increased its bottom line by earning $3.20 versus $1.23 in the prior year.
- 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. When compared to other companies in the Food Products industry and the overall market, INDUSTRIAS BACHOCO SAB DE CV's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for INDUSTRIAS BACHOCO SAB DE CV is currently extremely low, coming in at 6.00%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -3.70% is significantly below that of the industry average.