Why Black Diamond (BDE) Stock Is Higher Today

NEW YORK (TheStreet) -- Shares of Black Diamond Inc. (BDE) are up 6.55% to $12.36 after the outdoor recreation activities-related company signed a definitive asset purchase agreement to sell its Gregory Mountain Products, LLC brand for $85 million to Samsonite  (SMSOF).

The transaction is expected to close in late July.

For the twelve-month periods ended December 31, 2012 and 2013, Gregory recorded total sales of $30.6 million and $34.9 million, respectively.

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

"We rate BLACK DIAMOND INC (BDE) 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 revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow."

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

  • BDE's revenue growth has slightly outpaced the industry average of 5.4%. Since the same quarter one year prior, revenues slightly increased by 6.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • BDE's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, BDE has a quick ratio of 1.88, which demonstrates the ability of the company to cover short-term liquidity needs.
  • BLACK DIAMOND INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BLACK DIAMOND INC swung to a loss, reporting -$0.19 versus $0.08 in the prior year. This year, the market expects an improvement in earnings ($0.01 versus -$0.19).
  • 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 Leisure Equipment & Products industry and the overall market, BLACK DIAMOND INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$7.11 million or 355800.00% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: BDE Ratings Report

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