Kingold Jewelry Inc. Stock Upgraded (KGJI)

NEW YORK ( TheStreet) -- Kingold Jewelry (Nasdaq: KGJI) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 11.3%. Since the same quarter one year prior, revenues rose by 42.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 40.42% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • KGJI's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market on the basis of return on equity, KINGOLD JEWELRY INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The gross profit margin for KINGOLD JEWELRY INC is currently extremely low, coming in at 5.30%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.30% trails that of the industry average.
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Kingold Jewelry, Inc. engages in the design, manufacture, and sale of gold jewelry and Chinese ornaments in the People's Republic of China. It provides a range of gold products, including gold necklaces, rings, earrings, bracelets, pendants, and gold bars. The company has a P/E ratio of 4.7, equal to the average metals & mining industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Kingold has a market cap of $135 million and is part of the basic materials sector and metals & mining industry. Shares are up 131.6% year to date as of the close of trading on Thursday.

You can view the full Kingold Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet Ratings Staff
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