Why Gramcery Property Trust (GPT) Stock Is Up Today

NEW YORK (TheStreet) -- Gramcery Property Trust (GPT) was gaining 1.5% Wednesday after upsizing its secondary offering to 40 million shares from 34 million shares.

Gramercy Property Trust priced the upsized offering at $4.98 a share. The underwriters of the offering will have a 30-day option to purchase up to an addition 6 million shares of common stock.

The company said it plans to use part of the net proceeds of the offering to fund the its recently-announced acquisition of the 50% joint venture interest held by Garrison Investment Group affiliates. Gramercy Property Trust currently owns 50% of the joint venture.

The rest of the proceeds will be used for general corporate purposes including acquisitions and working capital purposes.

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TheStreet Ratings team rates GRAMERCY PROPERTY TRUST INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate GRAMERCY PROPERTY TRUST INC (GPT) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • GPT's very impressive revenue growth greatly exceeded the industry average of 9.8%. Since the same quarter one year prior, revenues leaped by 100.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • GRAMERCY PROPERTY TRUST INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, GRAMERCY PROPERTY TRUST INC continued to lose money by earning -$0.25 versus -$0.48 in the prior year. This year, the market expects an improvement in earnings ($0.06 versus -$0.25).
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The gross profit margin for GRAMERCY PROPERTY TRUST INC is currently extremely low, coming in at 13.47%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, GPT's net profit margin of -3.09% significantly underperformed when compared to the industry average.
  • 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 100.1% when compared to the same quarter one year ago, falling from $395.18 million to -$0.50 million.
  • You can view the full analysis from the report here: GPT Ratings Report

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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.

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