Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Alliance One International (NYSE: AOI) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, poor profit margins, weak operating cash flow and feeble growth in its earnings per share.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Tobacco industry. The net income has decreased by 19.9% when compared to the same quarter one year ago, dropping from -$30.74 million to -$36.86 million.
- The debt-to-equity ratio is very high at 4.95 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.50, which clearly demonstrates the inability to cover short-term cash needs.
- The gross profit margin for ALLIANCE ONE INTL INC is currently extremely low, coming in at 9.69%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -9.60% is significantly below that of the industry average.
- Net operating cash flow has decreased to -$238.39 million or 27.54% 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.
- ALLIANCE ONE INTL INC's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ALLIANCE ONE INTL INC reported lower earnings of $0.18 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($0.45 versus $0.18).