Why Excel Trust (EXL) Stock Is Down Today

NEW YORK (TheStreet) -- Excel Trust (EXL) was falling -5.2% to $13.20 Friday after pricing an 11 million share public offering.

The company priced the public offering of 11 million shares of common stock at $13.25 a share. The underwriters of the offering have a 30-day option to buy an additional 1.65 million shares.

Excel Trust expects net proceeds of $139.6 million from the offering, or $160.6 million is the underwriters fully exercise their option to buy more shares. The company will use the net proceeds to partially pay for certain property acquisitions.

Barclays Capital and Raymond James & Associates are joint book-running managers for the offering.

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

"We rate EXCEL TRUST INC (EXL) 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, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."

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

  • EXL's revenue growth has slightly outpaced the industry average of 10.3%. Since the same quarter one year prior, revenues rose by 14.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • EXCEL 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. During the past fiscal year, EXCEL TRUST INC continued to lose money by earning -$0.08 versus -$0.27 in the prior year.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, EXCEL TRUST INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for EXCEL TRUST INC is rather low; currently it is at 23.66%. Regardless of EXL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, EXL's net profit margin of 7.14% is significantly lower than the industry average.
  • You can view the full analysis from the report here: EXL 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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