Paulson Capital Corp. Stock Upgraded (PLCC)

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) -- Paulson Capital (Nasdaq: PLCC) 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, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.

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Highlights from the ratings report include:
  • PLCC's very impressive revenue growth greatly exceeded the industry average of 7.8%. Since the same quarter one year prior, revenues leaped by 524.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 216.66% and other important driving factors, this stock has surged by 37.51% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • Net operating cash flow has decreased to -$0.06 million or 36.95% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Capital Markets industry and the overall market, PAULSON CAPITAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.

Paulson Capital Corp., through its subsidiary, Paulson Investment Company, Inc., operates in the financial services industry in the United States. Paulson has a market cap of $7.5 million and is part of the financial sector and financial services industry. Shares are up 11.6% year to date as of the close of trading on Tuesday.

You can view the full Paulson 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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