NEW YORK ( TheStreet) -- Central Bancorp (Nasdaq: CEBK) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 135.83% to $0.39 million when compared to the same quarter last year. In addition, CENTRAL BANCORP INC/MA has also vastly surpassed the industry average cash flow growth rate of -142.98%.
- The gross profit margin for CENTRAL BANCORP INC/MA is rather high; currently it is at 69.10%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CEBK's net profit margin of 3.20% significantly trails the industry average.
- Despite the weak revenue results, CEBK has outperformed against the industry average of 24.0%. Since the same quarter one year prior, revenues slightly dropped by 7.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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 Thrifts & Mortgage Finance industry. The net income has significantly decreased by 49.0% when compared to the same quarter one year ago, falling from $0.40 million to $0.20 million.
- 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 on the basis of return on equity, CENTRAL BANCORP INC/MA underperformed against that of the industry average and is significantly less than that of the S&P 500.