NEW YORK ( TheStreet) -- Le Gaga Holdings (Nasdaq: GAGA) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself. Highlights from the ratings report include:
- GAGA'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 43.84%, 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- The gross profit margin for LE GAGA HOLDINGS LTD -ADR is currently very high, coming in at 75.30%. Regardless of GAGA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GAGA's net profit margin of 44.30% significantly outperformed against the industry.
- Net operating cash flow has significantly increased by 1667.84% to $8.52 million when compared to the same quarter last year. In addition, LE GAGA HOLDINGS LTD -ADR has also vastly surpassed the industry average cash flow growth rate of 696.89%.
- Although GAGA's debt-to-equity ratio of 0.05 is very low, it is currently higher than that of the industry average.
- Compared to other companies in the Food Products industry and the overall market on the basis of return on equity, LE GAGA HOLDINGS LTD -ADR has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
-- Written by a member of TheStreet Ratings Staff