China Cord Blood Corp Stock Upgraded (CO)

NEW YORK ( TheStreet) -- China Cord Blood (NYSE: CO) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.2%. Since the same quarter one year prior, revenues slightly increased by 7.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CO's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.43, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Health Care Providers & Services industry average. The net income increased by 13.4% when compared to the same quarter one year prior, going from $4.09 million to $4.63 million.
  • 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. When compared to other companies in the Health Care Providers & Services industry and the overall market, CHINA CORD BLOOD CORP's return on equity is below that of both the industry average and the S&P 500.
  • CO has underperformed the S&P 500 Index, declining 23.34% 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.

China Cord Blood Corporation, together with its subsidiaries, engages in the provision of umbilical cord blood storage and ancillary services in its cord blood banks in the People's Republic of China. The company has a P/E ratio of 9.3, above the average health services industry P/E ratio of 9.1 and below the S&P 500 P/E ratio of 17.7. China Cord Blood has a market cap of $190.2 million and is part of the health care sector and health services industry. Shares are down 4.5% year to date as of the close of trading on Monday.

You can view the full China Cord Blood Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
null

If you liked this article you might like

China Cord Blood (CO): Today's Weak On High Volume Stock

Monster Beverage Takes Profit Hit to Prep for Partnership With Coca-Cola

China Cord Blood (CO) Is Today's Strong On High Volume Stock

CEOs Just Can't Let Go of the Company Jet for Personal Use – Even When They Should