NEW YORK ( TheStreet) -- Swift Energy Company (NYSE: SFY) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and feeble growth in the company's earnings per share. Highlights from the ratings report include:
- Net operating cash flow has slightly increased to $63.78 million or 3.18% when compared to the same quarter last year. Despite an increase in cash flow, SWIFT ENERGY CO's average is still marginally south of the industry average growth rate of 10.51%.
- The gross profit margin for SWIFT ENERGY CO is rather high; currently it is at 69.00%. Regardless of SFY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.60% trails 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 82.3% when compared to the same quarter one year ago, falling from $20.18 million to $3.57 million.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 49.89%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 82.97% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, SFY is still more expensive than most of the other companies in its industry.
-- Written by a member of TheStreet Ratings Staff