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) -- Guanwei Recycling (Nasdaq: GPRC) 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, attractive valuation levels and notable return on equity. 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 poor profit margins.
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- GPRC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 7.54, which clearly demonstrates the ability to cover short-term cash needs.
- GPRC, with its decline in revenue, underperformed when compared the industry average of 3.8%. Since the same quarter one year prior, revenues fell by 11.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for GUANWEI RECYCLING CORP is currently extremely low, coming in at 11.25%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.29% trails that of the industry average.
- Net operating cash flow has significantly decreased to -$2.67 million or 155.99% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.