NEW YORK ( TheStreet) -- Albany International Corporation (NYSE: AIN) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. 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 weak operating cash flow. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 181.1% when compared to the same quarter one year prior, rising from $16.73 million to $47.04 million.
- The debt-to-equity ratio is somewhat low, currently at 0.68, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, AIN has a quick ratio of 1.60, which demonstrates the ability of the company to cover short-term liquidity needs.
- 45.70% is the gross profit margin for ALBANY INTL CORP which we consider to be strong. Regardless of AIN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AIN's net profit margin of 24.90% significantly outperformed against the industry.
- Net operating cash flow has significantly decreased to -$42.67 million or 302.71% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Machinery industry and the overall market, ALBANY INTL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff