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) -- China Ceramics (Nasdaq: CCCL) has been upgraded by TheStreet Ratings from sell 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, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share and a generally disappointing performance in the stock itself.
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- CCCL's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CCCL has a quick ratio of 1.92, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for CHINA CERAMICS CO LTD is currently lower than what is desirable, coming in at 32.80%. Regardless of CCCL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CCCL's net profit margin of 18.90% significantly outperformed against the industry.
- Looking at the price performance of CCCL's shares over the past 12 months, there is not much good news to report: the stock is down 48.27%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- CHINA CERAMICS CO LTD's earnings per share declined by 13.4% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, CHINA CERAMICS CO LTD reported lower earnings of $2.48 versus $2.93 in the prior year.
-- Written by a member of TheStreet Ratings Staff