NEW YORK ( TheStreet) -- Westway Group (Nasdaq: WWAY) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, deteriorating net income and poor profit margins.
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- The revenue growth came in higher than the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 4.6%. 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.
- Compared to its closing price of one year ago, WWAY's share price has jumped by 30.00%, exceeding the performance of the broader market during that same time frame. Although WWAY had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- Despite currently having a low debt-to-equity ratio of 0.31, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
- The change in net income from the same quarter one year ago has exceeded that of the Food Products industry average, but is less than that of the S&P 500. The net income has decreased by 0.9% when compared to the same quarter one year ago, dropping from $1.75 million to $1.73 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Food Products industry and the overall market on the basis of return on equity, WESTWAY GROUP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
-- Written by a member of TheStreet Ratings Staff