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) -- American Assets (NYSE: AAT) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
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- AMERICAN ASSETS TRUST INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, AMERICAN ASSETS TRUST INC turned its bottom line around by earning $0.24 versus -$0.03 in the prior year. This year, the market expects an improvement in earnings ($0.29 versus $0.24).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 47.6% when compared to the same quarter one year prior, rising from $2.95 million to $4.36 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, AMERICAN ASSETS TRUST INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for AMERICAN ASSETS TRUST INC is currently lower than what is desirable, coming in at 32.88%. Regardless of AAT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AAT's net profit margin of 6.66% is significantly lower than the industry average.