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) -- Bunge (NYSE: BG) 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 and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.
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- Net operating cash flow has significantly increased by 915.60% to $1,411.00 million when compared to the same quarter last year. In addition, BUNGE LTD has also vastly surpassed the industry average cash flow growth rate of 12.05%.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- BG, with its decline in revenue, underperformed when compared the industry average of 0.2%. Since the same quarter one year prior, revenues fell by 11.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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 Food Products industry and the overall market, BUNGE LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for BUNGE LTD is currently extremely low, coming in at 5.72%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.00% is significantly below that of the industry average.