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) -- TMS International (NYSE: TMS) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow and poor profit margins.
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- 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. When compared to other companies in the Commercial Services & Supplies industry and the overall market, TMS INTERNATIONAL CORP's return on equity is below that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to $20.41 million or 54.51% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The gross profit margin for TMS INTERNATIONAL CORP is currently extremely low, coming in at 9.40%. Regardless of TMS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.12% trails the industry average.
- The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Commercial Services & Supplies industry average. The net income has decreased by 1.4% when compared to the same quarter one year ago, dropping from $6.15 million to $6.06 million.
- TMS, with its decline in revenue, slightly underperformed the industry average of 11.3%. Since the same quarter one year prior, revenues fell by 12.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
-- Written by a member of TheStreet Ratings Staff