Winthrop Realty Trust Inc. Stock Downgraded (FUR)

NEW YORK ( TheStreet) -- Winthrop Realty (NYSE: FUR) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The debt-to-equity ratio is somewhat low, currently at 0.77, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • FUR, with its very weak revenue results, has greatly underperformed against the industry average of 15.6%. Since the same quarter one year prior, revenues plummeted by 104.4%. 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 367.6% when compared to the same quarter one year ago, falling from $3.83 million to -$10.25 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 Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, WINTHROP REALTY TRUST underperformed against that of the industry average and is significantly less than that of the S&P 500.
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Operates as a real estate investment trust, headquartered in Boston. As of Dec. 31, 2005, in addition to cash reserves and government securities, the trust primarily owned an office building, commonly referred to as Circle Tower, located in Indianapolis, IN and 16 triple-net lease properties. The company has a P/E ratio of 14.2, above the average real estate industry P/E ratio of 13.9 and below the S&P 500 P/E ratio of 17.7. Winthrop has a market cap of $366.4 million and is part of the financial sector and real estate industry. Shares are up 10.1% year to date as of the close of trading on Friday.

You can view the full Winthrop Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet Ratings Staff
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