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) -- INTL FCStone (Nasdaq: INTL) 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, disappointing return on equity and poor profit margins.
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- Net operating cash flow has increased to $42.60 million or 45.89% when compared to the same quarter last year. Despite an increase in cash flow of 45.89%, INTL FCSTONE INC is still growing at a significantly lower rate than the industry average of 124.49%.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 16.6%. Since the same quarter one year prior, revenues slightly dropped by 9.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- INTL FCSTONE INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, INTL FCSTONE INC increased its bottom line by earning $0.98 versus $0.64 in the prior year.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, INTL FCSTONE INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for INTL FCSTONE INC is currently extremely low, coming in at 7.76%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 2.20% significantly trails the industry average.