Colony Financial Inc Stock Upgraded (CLNY)

NEW YORK ( TheStreet) -- Colony Financial (NYSE: CLNY) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • CLNY's very impressive revenue growth greatly exceeded the industry average of 16.8%. Since the same quarter one year prior, revenues leaped by 94.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • CLNY's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 69.3% when compared to the same quarter one year prior, rising from $7.36 million to $12.47 million.
  • Net operating cash flow has significantly increased by 721.30% to $14.57 million when compared to the same quarter last year. In addition, COLONY FINANCIAL INC has also vastly surpassed the industry average cash flow growth rate of -37.43%.
  • The gross profit margin for COLONY FINANCIAL INC is rather high; currently it is at 68.10%. Regardless of CLNY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CLNY's net profit margin of 57.10% significantly outperformed against the industry.

Colony Financial, Inc. operates as a real estate finance and investment company that focuses primarily on acquiring, originating, and managing commercial mortgage loans, and other commercial real estate-related debt investments. The company has a P/E ratio of 12.9, above the average real estate industry P/E ratio of 12.8 and below the S&P 500 P/E ratio of 17.7. Colony Financial has a market cap of $608.5 million and is part of the financial sector and real estate industry. Shares are up 17.5% year to date as of the close of trading on Tuesday.

You can view the full Colony Financial 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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