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) -- Noranda Aluminum (NYSE: NOR) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and generally higher debt management risk.
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- Net operating cash flow has significantly increased by 87.19% to -$2.10 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 43.84%.
- NOR, with its decline in revenue, slightly underperformed the industry average of 3.3%. Since the same quarter one year prior, revenues slightly dropped by 4.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The debt-to-equity ratio is very high at 4.17 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, NOR maintains a poor quick ratio of 0.81, which illustrates the inability to avoid short-term cash problems.
- The gross profit margin for NORANDA ALUMINUM HOLDING CP is rather low; currently it is at 16.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.17% trails that of the industry average.
-- Written by a member of TheStreet Ratings Staff