NEW YORK ( TheStreet) -- Apco Oil and Gas International (Nasdaq: APAGF) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 24.9%. Since the same quarter one year prior, revenues rose by 23.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- APAGF's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.69, which clearly demonstrates the ability to cover short-term cash needs.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Oil, Gas & Consumable Fuels industry average. The net income increased by 6.5% when compared to the same quarter one year prior, going from $8.10 million to $8.63 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, APCO OIL AND GAS INTL INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- APAGF'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 42.80%, 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. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, APAGF is still more expensive than most of the other companies in its industry.
-- Written by a member of TheStreet Ratings Staff