NEW YORK ( TheStreet) -- Campus Crest Communities (NYSE: CCG) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, unimpressive growth in net income, poor profit margins and feeble growth in its earnings per share. Highlights from the ratings report include:
- In its most recent trading session, CCG has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 105.7% when compared to the same quarter one year ago, falling from -$0.47 million to -$0.97 million.
- The gross profit margin for CAMPUS CREST COMMUNITIES INC is currently extremely low, coming in at 8.20%. Regardless of CCG's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CCG's net profit margin of -2.90% significantly underperformed when compared to the industry average.
- CAMPUS CREST COMMUNITIES INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CAMPUS CREST COMMUNITIES INC turned its bottom line around by earning $0.11 versus -$0.46 in the prior year. For the next year, the market is expecting a contraction of 154.5% in earnings (-$0.06 versus $0.11).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, CAMPUS CREST COMMUNITIES INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
-- Written by a member of TheStreet Ratings Staff