AmREIT Inc Stock Upgraded (AMRE)

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) -- AmREIT (NYSE: AMRE) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself.

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Highlights from the ratings report include:
  • AMRE's revenue growth has slightly outpaced the industry average of 7.4%. Since the same quarter one year prior, revenues rose by 14.1%. 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.
  • When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, AMREIT INC's return on equity is below that of both the industry average and the S&P 500.
  • The share price of AMREIT INC has not done very well: it is down 7.45% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The gross profit margin for AMREIT INC is rather low; currently it is at 23.82%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 10.75% significantly trails the industry average.

AmREIT, Inc. operates as a real estate investment trust (REIT) in the United States. It provides development, acquisitions, brokerage, leasing, construction, general contracting, asset, and property management services. The company has a P/E ratio of 26.7, above the S&P 500 P/E ratio of 17.7. AmREIT has a market cap of $319.5 million and is part of the financial sector and real estate industry. Shares are down 4.2% year to date as of the close of trading on Tuesday.

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

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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