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) -- ASB Bancorp (Nasdaq: ASBB) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and disappointing return on equity.
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- Net operating cash flow has significantly increased by 177.02% to $4.68 million when compared to the same quarter last year. In addition, ASB BANCORP INC has also vastly surpassed the industry average cash flow growth rate of -38.69%.
- The gross profit margin for ASB BANCORP INC is currently very high, coming in at 88.62%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, ASBB's net profit margin of 5.61% significantly trails the industry average.
- ASB BANCORP INC's earnings per share declined by 40.0% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, ASB BANCORP INC increased its bottom line by earning $0.31 versus $0.18 in the prior year.
- 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 Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, ASB BANCORP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- 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 Thrifts & Mortgage Finance industry. The net income has significantly decreased by 45.4% when compared to the same quarter one year ago, falling from $0.74 million to $0.40 million.