Great Panther Silver Ltd. Stock Downgraded (GPL)

NEW YORK ( TheStreet) -- Great Panther Silver (AMEX: GPL) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • GPL's debt-to-equity ratio is very low at 0.00 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 8.05, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 132.24% to $6.42 million when compared to the same quarter last year. In addition, GREAT PANTHER SILVER LTD has also vastly surpassed the industry average cash flow growth rate of -32.59%.
  • The gross profit margin for GREAT PANTHER SILVER LTD is rather high; currently it is at 57.10%. Regardless of GPL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GPL's net profit margin of 34.40% significantly outperformed against the industry.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 56.39%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 40.00% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, GPL is still more expensive than most of the other companies in its industry.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Metals & Mining industry. The net income has significantly decreased by 33.2% when compared to the same quarter one year ago, falling from $7.01 million to $4.68 million.

Great Panther Silver Limited engages in the business of acquisition, exploration, development, and operation of mineral properties and mines in Mexico. The company has a P/E ratio of 27.2, below the average metals & mining industry P/E ratio of 32.2 and above the S&P 500 P/E ratio of 17.7. Great Panther has a market cap of $232.5 million and is part of the basic materials sector and metals & mining industry. Shares are down 11.8% year to date as of the close of trading on Thursday.

You can view the full Great Panther 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.
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