Outdoors Channel Holdings Inc. Stock Downgraded (OUTD)

NEW YORK ( TheStreet) -- Outdoors Channel Holdings (Nasdaq: OUTD) 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, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and unimpressive growth in net income.

Highlights from the ratings report include:
  • OUTD has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.90, which clearly demonstrates the ability to cover short-term cash needs.
  • OUTDOOR CHANNEL HLDGS INC reported flat earnings per share in the most recent quarter. 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, OUTDOOR CHANNEL HLDGS INC increased its bottom line by earning $0.08 versus $0.05 in the prior year. This year, the market expects an improvement in earnings ($0.14 versus $0.08).
  • Net operating cash flow has slightly increased to $5.23 million or 7.16% when compared to the same quarter last year. Despite an increase in cash flow, OUTDOOR CHANNEL HLDGS INC's cash flow growth rate is still lower than the industry average growth rate of 19.34%.
  • The change in net income from the same quarter one year ago has exceeded that of the Media industry average, but is less than that of the S&P 500. The net income has decreased by 1.2% when compared to the same quarter one year ago, dropping from $1.47 million to $1.46 million.
  • OUTD has underperformed the S&P 500 Index, declining 19.64% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

Outdoor Channel Holdings, Inc., through its subsidiaries, operates as an entertainment and media company in the United States. The company operates in two segments, The Outdoor Channel and Production Services. The company has a P/E ratio of 81.5, below the average media industry P/E ratio of 96.1 and above the S&P 500 P/E ratio of 17.7. Outdoors Channel has a market cap of $195.6 million and is part of the services sector and media industry. Shares are down 17.7% year to date as of the close of trading on Wednesday.

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