NEW YORK ( TheStreet) -- Walter Investment Management (AMEX: WAC) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.
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- 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 Capital Markets industry and the overall market, WALTER INVESTMENT MGMT CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- In its most recent trading session, WAC has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Regardless of the rise in share value over the previous year, we feel that the risks involved in investing in this stock do not compensate for any future upside potential.
- 43.70% is the gross profit margin for WALTER INVESTMENT MGMT CORP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, WAC's net profit margin of 0.30% is significantly lower than the same period one year prior.
- WALTER INVESTMENT MGMT CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, WALTER INVESTMENT MGMT CORP swung to a loss, reporting -$2.44 versus $1.38 in the prior year. This year, the market expects an improvement in earnings ($2.83 versus -$2.44).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 112.6% when compared to the same quarter one year prior, rising from -$3.40 million to $0.43 million.
-- Written by a member of TheStreet Ratings Staff