NEW YORK ( TheStreet) -- First Financial Holdings (Nasdaq: FFCH) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- FIRST FINANCIAL HOLDINGS 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, FIRST FINANCIAL HOLDINGS INC continued to lose money by earning -$2.51 versus -$2.61 in the prior year. This year, the market expects an improvement in earnings ($0.35 versus -$2.51).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Thrifts & Mortgage Finance industry. The net income increased by 191.9% when compared to the same quarter one year prior, rising from -$1.17 million to $1.08 million.
- Despite the weak revenue results, FFCH has outperformed against the industry average of 19.0%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- FFCH has underperformed the S&P 500 Index, declining 24.49% from its price level of one year ago. 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.
- 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 Thrifts & Mortgage Finance industry and the overall market, FIRST FINANCIAL HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.