NEW YORK ( TheStreet) -- Empresas ICA S.A.B. de C.V (NYSE: ICA) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, disappointing return on equity, weak operating cash flow, poor profit margins and generally weak debt management. Highlights from the ratings report include:
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 49.57%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 500.00% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, ICA is still more expensive than most of the other companies in its industry.
- 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 Construction & Engineering industry and the overall market on the basis of return on equity, EMPRESAS ICA SAB DE CV underperformed against that of the industry average and is significantly less than that of the S&P 500.
- Net operating cash flow has significantly decreased to -$212.84 million or 91.33% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The gross profit margin for EMPRESAS ICA SAB DE CV is currently extremely low, coming in at 14.30%. 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 10.10% is above that of the industry average.
- The debt-to-equity ratio is very high at 2.89 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Even though the debt-to-equity ratio is weak, ICA's quick ratio is somewhat strong at 1.23, demonstrating the ability to handle short-term liquidity needs.