NEW YORK ( TheStreet) -- China Mass Media (NYSE: CMM) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 171.6% when compared to the same quarter one year prior, rising from $0.64 million to $1.74 million.
- CMM has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, CMM has a quick ratio of 2.27, which demonstrates the ability of the company to cover short-term liquidity needs.
- CMM, with its decline in revenue, underperformed when compared the industry average of 21.1%. Since the same quarter one year prior, revenues slightly dropped by 3.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- 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. When compared to other companies in the Media industry and the overall market, CHINA MASS MEDIA CORP -ADS's return on equity is below that of both the industry average and the S&P 500.
- In its most recent trading session, CMM has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.