Editor's Note: 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. NEW YORK ( TheStreet) -- HFF (NYSE: HF) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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- Compared to its closing price of one year ago, HF's share price has jumped by 71.51%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Capital Markets industry and the overall market, HFF INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Despite the weak revenue results, HF has outperformed against the industry average of 27.0%. Since the same quarter one year prior, revenues slightly dropped by 8.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- HFF INC's earnings per share declined by 17.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, HFF INC increased its bottom line by earning $1.10 versus $0.37 in the prior year. For the next year, the market is expecting a contraction of 3.6% in earnings ($1.06 versus $1.10).
- The change in net income from the same quarter one year ago has exceeded that of the Capital Markets industry average, but is less than that of the S&P 500. The net income has decreased by 15.6% when compared to the same quarter one year ago, dropping from $12.86 million to $10.86 million.
-- Written by a member of TheStreet Ratings Staff