NEW YORK ( TheStreet) -- Southern Community Financial (Nasdaq: SCMF) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins and impressive record of earnings per share growth. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall. 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 Commercial Banks industry. The net income increased by 109.2% when compared to the same quarter one year prior, rising from -$10.82 million to $1.00 million.
- The gross profit margin for SOUTHERN CMNTY FINL CORP is rather high; currently it is at 59.50%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 4.70% trails the industry average.
- SCMF, with its decline in revenue, underperformed when compared the industry average of 3.1%. Since the same quarter one year prior, revenues fell by 10.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, SOUTHERN CMNTY FINL CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- Net operating cash flow has decreased to $7.59 million or 26.09% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
-- Written by a member of TheStreet RatingsStaff