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) -- Fibria Celulose (NYSE: FBR) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been weak operating cash flow.
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- Net operating cash flow has decreased to $205.50 million or 20.22% 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 return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Paper & Forest Products industry and the overall market, FIBRIA CELULOSE SA's return on equity significantly trails that of both the industry average and the S&P 500.
- 47.00% is the gross profit margin for FIBRIA CELULOSE SA which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 1.50% trails the industry average.
- This stock has increased by 61.84% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in FBR do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- FIBRIA CELULOSE SA 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, FIBRIA CELULOSE SA continued to lose money by earning -$0.63 versus -$1.28 in the prior year. This year, the market expects an improvement in earnings ($0.33 versus -$0.63).
-- Written by a member of TheStreet Ratings Staff