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NEW YORK ( TheStreet) -- Seaboard (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 largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. 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:
  • SEB's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, SEB has a quick ratio of 1.87, which demonstrates the ability of the company to cover short-term liquidity needs.
  • SEB, with its decline in revenue, underperformed when compared the industry average of 4.3%. Since the same quarter one year prior, revenues slightly dropped by 6.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Food Products industry. The net income has decreased by 16.2% when compared to the same quarter one year ago, dropping from $57.45 million to $48.17 million.
  • 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. In comparison to the other companies in the Food Products industry and the overall market, SEABOARD CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

Seaboard Corporation, an agribusiness and transportation company, is engaged in the production, processing, and ocean transportation of pork worldwide. Its Pork division is involved in hog production and pork processing; and the production and sale of fresh and frozen pork products. Seaboard has a market cap of $2.85 billion and is part of the conglomerates sector and conglomerates industry. Shares are down 14.1% year to date as of the close of trading on Thursday.

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

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