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) -- Coleman Cable (Nasdaq: CCIX) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and notable return on equity. However, as a counter to these strengths, we also find weaknesses including poor profit margins and generally higher debt management risk.
- Compared to its closing price of one year ago, CCIX's share price has jumped by 104.39%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.9%. Since the same quarter one year prior, revenues slightly increased by 1.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- COLEMAN CABLE INC's earnings per share declined by 6.8% 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, COLEMAN CABLE INC increased its bottom line by earning $1.34 versus $1.00 in the prior year. This year, the market expects an improvement in earnings ($1.72 versus $1.34).
- The debt-to-equity ratio is very high at 4.26 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, CCIX has managed to keep a strong quick ratio of 1.76, which demonstrates the ability to cover short-term cash needs.
- The gross profit margin for COLEMAN CABLE INC is rather low; currently it is at 16.69%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.13% trails that of the industry average.