NEW YORK ( TheStreet) -- CIFC (Nasdaq: DFR) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally weak debt management, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
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- The debt-to-equity ratio is very high at 67.41 and currently higher than the industry average, implying that there is very poor management of debt levels within the company.
- 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 Capital Markets industry and the overall market, CIFC CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$32.71 million or 16252.50% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- DFR has underperformed the S&P 500 Index, declining 7.20% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- CIFC CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CIFC CORP swung to a loss, reporting -$1.60 versus $6.29 in the prior year.
-- Written by a member of TheStreet Ratings Staff