NEW YORK ( TheStreet) -- CGG Veritas (NYSE: CGV) 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 and weak operating cash flow. Highlights from the ratings report include:
- CGV'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 41.63%, 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.
- Net operating cash flow has declined marginally to $192.50 million or 8.60% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, CGG VERITAS has marginally lower results.
- 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 Energy Equipment & Services industry and the overall market, CGG VERITAS's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite currently having a low debt-to-equity ratio of 0.51, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.19 is sturdy.
- 38.50% is the gross profit margin for CGG VERITAS which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -1.10% is in-line with the industry average.
-- Written by a member of TheStreet Ratings Staff