Resource America Inc. CL A Stock Downgraded (REXI)

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) -- Resource America Inc. CL A (Nasdaq: REXI) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

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Highlights from the ratings report include:
  • REXI's revenue growth has slightly outpaced the industry average of 4.1%. Since the same quarter one year prior, revenues slightly increased by 4.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • REXI's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Net operating cash flow has significantly increased by 347.66% to $4.29 million when compared to the same quarter last year. Despite an increase in cash flow of 347.66%, RESOURCE AMERICA INC is still growing at a significantly lower rate than the industry average of 604.01%.
  • The gross profit margin for RESOURCE AMERICA INC is rather low; currently it is at 22.20%. Regardless of REXI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, REXI's net profit margin of 4.81% is significantly lower than the industry average.
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Resource America, Inc. operates as an asset management company. The company, through its subsidiaries, operates in three segments: Financial Fund Management; Real Estate; and Equipment Finance. The company has a P/E ratio of 6.5, below the S&P 500 P/E ratio of 17.7. Resource America Inc. CL A has a market cap of $173 million and is part of the financial sector and financial services industry. Shares are up 31.5% year to date as of the close of trading on Friday.

You can view the full Resource America Inc. CL A Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

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