NEW YORK ( TheStreet) -- Edgen Group (NYSE: EDG) 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, notable return on equity and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and poor profit margins.
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- Net operating cash flow has significantly increased by 126.68% to $12.83 million when compared to the same quarter last year. In addition, EDGEN GROUP INC has also vastly surpassed the industry average cash flow growth rate of 55.66%.
- Compared to other companies in the Trading Companies & Distributors industry and the overall market, EDGEN GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Trading Companies & Distributors industry. The net income has significantly decreased by 220.0% when compared to the same quarter one year ago, falling from $4.09 million to -$4.91 million.
- The debt-to-equity ratio is very high at 7.17 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, EDG maintains a poor quick ratio of 0.99, which illustrates the inability to avoid short-term cash problems.