NEW YORK ( TheStreet) -- Mosaic (NYSE: MOS) 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 and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and disappointing return on equity. Highlights from the ratings report include:
- MOS's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, MOS has a quick ratio of 2.39, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $404.50 million or 10.54% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -35.11%.
- MOS, with its decline in revenue, slightly underperformed the industry average of 2.8%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for MOSAIC CO is currently lower than what is desirable, coming in at 29.60%. It has decreased significantly from the same period last year. Regardless of the weak results of the gross profit margin, the net profit margin of 12.50% is above that of the industry average.
- 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 Chemicals industry. The net income has significantly decreased by 49.6% when compared to the same quarter one year ago, falling from $542.10 million to $273.30 million.
-- Written by a member of TheStreet Ratings Staff