Why AMREP (AXR) Stock Is Soaring On Thursday

NEW YORK (TheStreet) -- Shares of AMERP Corp. (AXR) are skyrocketing 24.13% to $6.43 today after the company announced that it and its indirect subsidiaries, Kable Distribution Services Inc., and Palm Coastal Data LLC, have reached a deal with Heinrich Bauer (USA) LLC.

The agreement relates to the two distribution agreements between Kable Distribution and Bauer that will end on June 30, the company said.

As part of the settlement AMREP, a real estate and media services company, has agreed to issue Bauer 825,000 shares of its common stock, in return Bauer, a media company, agreed not to sell the stock for a period of six months.

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Bauer also agreed to extend the term of its fulfillment agreement with Palm Coast until at least December 2018, the company said.

Separately, TheStreet Ratings team rates AMREP CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate AMREP CORP (AXR) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and feeble growth in its earnings per share."

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

  • 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 Commercial Services & Supplies industry. The net income has significantly decreased by 466.7% when compared to the same quarter one year ago, falling from $0.00 million to -$0.01 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. Compared to other companies in the Commercial Services & Supplies industry and the overall market, AMREP CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for AMREP CORP is rather low; currently it is at 16.32%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.04% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$1.61 million or 142.56% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • AMREP CORP has shown no change in earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, AMREP CORP reported poor results of -$0.47 versus -$0.19 in the prior year.
  • You can view the full analysis from the report here: AXR Ratings Report
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