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) -- Pyramid Oil Company (AMEX: PDO) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and disappointing return on equity.
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- PDO's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 12.02, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 341.97% to $0.66 million when compared to the same quarter last year. In addition, PYRAMID OIL CO has also vastly surpassed the industry average cash flow growth rate of -5.70%.
- The gross profit margin for PYRAMID OIL CO is rather high; currently it is at 58.90%. Regardless of PDO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PDO's net profit margin of 21.60% significantly outperformed against the industry.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 32.3% when compared to the same quarter one year ago, falling from $0.43 million to $0.29 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PYRAMID OIL CO's return on equity is significantly below that of the industry average and is below that of the S&P 500.
-- Written by a member of TheStreet Ratings Staff