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) -- NewBridge Bancorp (Nasdaq: NBBC) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.
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- The revenue growth came in higher than the industry average of 2.5%. Since the same quarter one year prior, revenues rose by 11.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 3700.00% and other important driving factors, this stock has surged by 74.37% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although NBBC had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- 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 ($0.72 versus -$1.87).
- 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.
- Net operating cash flow has significantly decreased to -$1.25 million or 114.65% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.