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) -- Glimcher Realty (NYSE: GRT) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.
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- 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 Real Estate Investment Trusts (REITs) industry and the overall market, GLIMCHER REALTY TRUST's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for GLIMCHER REALTY TRUST is rather low; currently it is at 22.70%. Regardless of GRT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, GRT's net profit margin of 0.96% is significantly lower than the industry average.
- GRT has underperformed the S&P 500 Index, declining 22.42% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- GLIMCHER REALTY TRUST 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, GLIMCHER REALTY TRUST continued to lose money by earning -$0.24 versus -$0.33 in the prior year. This year, the market expects an improvement in earnings ($0.09 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 393.9% when compared to the same quarter one year prior, rising from -$0.31 million to $0.92 million.