NEW YORK ( TheStreet) -- Seneca Foods (Nasdaq: SENEA) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and generally poor debt management. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 24.9%. Since the same quarter one year prior, revenues slightly increased by 0.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 61.7% when compared to the same quarter one year prior, rising from $11.46 million to $18.53 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Food Products industry and the overall market on the basis of return on equity, SENECA FOODS CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- SENEA has underperformed the S&P 500 Index, declining 9.81% from its price level of one year ago. 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.
-- Written by a member of TheStreet Ratings Staff