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) -- Central Federal (Nasdaq: CFBK) has been downgraded by TheStreet Ratings from hold to sell. The area that we feel has been the company's primary weakness has been its relatively poor performance when compared with the S&P 500 during the past year.
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- In its most recent trading session, CFBK 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.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, CENTRAL FEDERAL CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for CENTRAL FEDERAL CORP is currently very high, coming in at 81.13%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -8.74% is in-line with the industry average.
- Net operating cash flow has significantly increased by 102.17% to $0.04 million when compared to the same quarter last year. In addition, CENTRAL FEDERAL CORP has also vastly surpassed the industry average cash flow growth rate of -73.18%.
- CENTRAL FEDERAL CORP 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. During the past fiscal year, CENTRAL FEDERAL CORP continued to lose money by earning -$0.06 versus -$1.69 in the prior year.