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) -- NewBridge Bancorp (Nasdaq: NBBC) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.
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- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Commercial Banks industry and the overall market, NEWBRIDGE BANCORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.9%. Since the same quarter one year prior, revenues slightly dropped by 1.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- NEWBRIDGE BANCORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NEWBRIDGE BANCORP swung to a loss, reporting -$1.87 versus $0.10 in the prior year. This year, the market expects an improvement in earnings ($0.63 versus -$1.87).
- The gross profit margin for NEWBRIDGE BANCORP is currently very high, coming in at 89.00%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 22.29% trails the industry average.
- Net operating cash flow has significantly increased by 113.92% to $13.36 million when compared to the same quarter last year. In addition, NEWBRIDGE BANCORP has also vastly surpassed the industry average cash flow growth rate of -60.08%.
-- Written by a member of TheStreet Ratings Staff