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) -- Peoples Federal (Nasdaq: PEOP) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and relatively poor performance when compared with the S&P 500 during the past year.
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- Net operating cash flow has significantly increased by 76.36% to $4.28 million when compared to the same quarter last year. In addition, PEOPLES FEDERAL BANCSHS INC has also vastly surpassed the industry average cash flow growth rate of -375.88%.
- The gross profit margin for PEOPLES FEDERAL BANCSHS INC is currently very high, coming in at 87.66%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, PEOP's net profit margin of 11.30% significantly trails the industry average.
- PEOPLES FEDERAL BANCSHS INC has improved earnings per share by 11.1% 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, PEOPLES FEDERAL BANCSHS INC reported lower earnings of $0.26 versus $0.47 in the prior year. This year, the market expects an improvement in earnings ($0.48 versus $0.26).
- In its most recent trading session, PEOP has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, PEOPLES FEDERAL BANCSHS INC underperformed against that of the industry average and is significantly less than that of the S&P 500.