NEW YORK ( TheStreet) -- Life Partners Holdings (Nasdaq: LPHI) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, premium valuation, weak operating cash flow and generally disappointing historical performance in the stock itself. 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 70.01%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 124.03% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- 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 Diversified Financial Services industry. The net income has significantly decreased by 127.3% when compared to the same quarter one year ago, falling from $3.96 million to -$1.08 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Diversified Financial Services industry and the overall market on the basis of return on equity, LIFE PARTNERS HOLDINGS INC 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 -$0.75 million or 123.36% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.