NEW YORK ( TheStreet) -- Capital Bank Corporation (Nasdaq: CBKN) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income 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.
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- CAPITAL BANK CORP/NC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, CAPITAL BANK CORP/NC turned its bottom line around by earning $0.05 versus -$4.91 in the prior year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 12368.2% when compared to the same quarter one year prior, rising from $0.02 million to $2.74 million.
- CBKN, with its very weak revenue results, has greatly underperformed against the industry average of 31.0%. Since the same quarter one year prior, revenues plummeted by 84.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, CAPITAL BANK CORP/NC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- CBKN'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 25.94%, 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.