Columbus McKinnon Corporation Stock Upgraded (CMCO)

NEW YORK ( TheStreet) -- Columbus McKinnon Corporation (Nasdaq: CMCO) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 257.4% when compared to the same quarter one year prior, rising from $1.87 million to $6.68 million.
  • CMCO's revenue growth trails the industry average of 31.8%. Since the same quarter one year prior, revenues rose by 13.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • COLUMBUS MCKINNON CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, COLUMBUS MCKINNON CORP reported poor results of -$1.92 versus -$0.40 in the prior year. This year, the market expects an improvement in earnings ($1.06 versus -$1.92).
  • CMCO's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 37.95%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • 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 Machinery industry and the overall market, COLUMBUS MCKINNON CORP's return on equity significantly trails that of both the industry average and the S&P 500.

Columbus McKinnon Corporation designs, manufactures, and markets material handling products for commercial and industrial end-user markets in the United States, Europe, Canada, and internationally. Columbus McKinnon has a market cap of $251.5 million and is part of the industrial goods sector and industrial industry. Shares are up 2.1% year to date as of the close of trading on Wednesday.

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