NEW YORK ( TheStreet) -- US Concrete (Nasdaq: USCR) 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, poor profit margins and disappointing return on equity. Highlights from the ratings report include:
- USCR'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 45.79%, 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. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- The gross profit margin for U S CONCRETE INC is currently extremely low, coming in at 11.50%. Regardless of USCR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, USCR's net profit margin of -8.30% significantly underperformed when compared to the industry average.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Construction Materials industry and the overall market on the basis of return on equity, U S CONCRETE INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- U S CONCRETE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, U S CONCRETE INC swung to a loss, reporting -$1.12 versus $3.77 in the prior year. This year, the market expects an improvement in earnings (-$0.88 versus -$1.12).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Construction Materials industry. The net income increased by 58.6% when compared to the same quarter one year prior, rising from -$24.71 million to -$10.23 million.
-- Written by a member of TheStreet Ratings Staff