Seaboard Corporation Stock Downgraded (SEB)

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) -- Seaboard Corporation (AMEX: SEB) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.0%. Since the same quarter one year prior, revenues rose by 11.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • SEB's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.45, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for SEABOARD CORP is currently extremely low, coming in at 7.56%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.87% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$41.38 million or 302.04% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Seaboard Corporation, an agribusiness and transportation company, engages in the production, processing, and ocean transportation of pork worldwide. The company has a P/E ratio of 14.9, below the S&P 500 P/E ratio of 17.7. Seaboard has a market cap of $3.02 billion and is part of the consumer goods sector and food & beverage industry. Shares are down 7.5% year to date as of the close of trading on Friday.

You can view the full Seaboard Ratings Report or get investment ideas from our investment research center.

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