NEW YORK ( TheStreet) -- CHINA NUOKANG BIO-PHARMACEUTICAL (Nasdaq: NKBP) has been upgraded by TheStreet Ratings from sell 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.
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- NKBP's debt-to-equity ratio is very low at 0.03 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 8.64, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for CHINA NUOKANG BIO-PHARMA-ADR is currently very high, coming in at 86.50%. Regardless of NKBP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NKBP's net profit margin of 1.20% is significantly lower than the same period one year prior.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 93.3% when compared to the same quarter one year ago, falling from $1.67 million to $0.11 million.
- 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 Pharmaceuticals industry and the overall market, CHINA NUOKANG BIO-PHARMA-ADR'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