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) -- Claude Resources (AMEX: CGR) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income and disappointing return on equity.
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- CLAUDE RESOURCES INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, CLAUDE RESOURCES INC reported lower earnings of $0.03 versus $0.06 in the prior year.
- 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 Metals & Mining industry. The net income has significantly decreased by 1560.2% when compared to the same quarter one year ago, falling from $0.68 million to -$9.92 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, CLAUDE RESOURCES INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- This stock's share value has moved by only 61.43% over the past year. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- CGR, with its decline in revenue, underperformed when compared the industry average of 5.8%. Since the same quarter one year prior, revenues fell by 20.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.