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) -- Hanmi Financial Corporation (Nasdaq: HAFC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.
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- Powered by its strong earnings growth of 75.00% and other important driving factors, this stock has surged by 53.06% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- HANMI FINANCIAL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, HANMI FINANCIAL CORP turned its bottom line around by earning $1.42 versus -$12.96 in the prior year. This year, the market expects an improvement in earnings ($2.87 versus $1.42).
- Despite the weak revenue results, HAFC has outperformed against the industry average of 21.9%. Since the same quarter one year prior, revenues slightly dropped by 4.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Net operating cash flow has decreased to $15.08 million or 26.19% when compared to the same quarter last year. Despite a decrease in cash flow HANMI FINANCIAL CORP is still fairing well by exceeding its industry average cash flow growth rate of -68.95%.
-- Written by a member of TheStreet Ratings Staff