Rating Change #9

Midsouth Bancorp ( MSL) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:
  • MSL's revenue growth has slightly outpaced the industry average of 3.2%. Since the same quarter one year prior, revenues slightly increased by 4.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for MIDSOUTH BANCORP INC is currently very high, coming in at 87.20%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MSL's net profit margin of 6.70% significantly trails the industry average.
  • Net operating cash flow has decreased to $2.76 million or 31.34% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • MIDSOUTH BANCORP INC 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, MIDSOUTH BANCORP INC reported lower earnings of $0.47 versus $0.51 in the prior year. For the next year, the market is expecting a contraction of 38.3% in earnings ($0.29 versus $0.47).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Banks industry. The net income has decreased by 11.3% when compared to the same quarter one year ago, dropping from $1.24 million to $1.10 million.

Midsouth Bancorp, Inc. operates as a bank holding company for MidSouth Bank, N.A. that provides various banking services to commercial and retail customers in south Louisiana and southeast Texas. The company has a P/E ratio of 38.9, equal to the average banking industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Midsouth has a market cap of $128.7 million and is part of the financial sector and banking industry. Shares are down 13.9% year to date as of the close of trading on Thursday.

You can view the full Midsouth Ratings Report or get investment ideas from our investment research center.

If you liked this article you might like

Nucor Is a 'Pounding-the-Table' Buy Here, Jim Cramer Says

Oil Refiners Are Rebounding: Cramer's 'Off the Charts'

New Relic: Cramer's Top Takeaways

Ventas Medical REIT: Cramer's Top Takeaways

When it Drops, it's Time to Shop: Cramer's 'Mad Money' Recap (Tuesday 9/12/17)