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 find that the growth in the company's net income has been quite unimpressive. 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 ($0.12 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 22.16%.
- 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. Compared to other companies in the Media industry and the overall market on the basis of return on equity, OUTDOOR CHANNEL HLDGS INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Media industry average. 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.
-- Written by a member of TheStreet Ratings Staff