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) -- PICO Holdings (Nasdaq: PICO) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and weak operating cash flow.
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- 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 Diversified Financial Services industry. The net income has significantly decreased by 123.6% when compared to the same quarter one year ago, falling from -$3.48 million to -$7.78 million.
- Net operating cash flow has significantly decreased to -$7.63 million or 393.34% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Diversified Financial Services industry and the overall market, PICO HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- In its most recent trading session, PICO has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- PICO HOLDINGS 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, PICO HOLDINGS INC continued to lose money by earning -$0.98 versus -$1.14 in the prior year.