Why Equity One (EQY) Stock Is Lower Today

NEW YORK (TheStreet) -- Shares of Equity One, Inc.  (EQY) are down 2.21% to $23.01 on extremely heavy trading volume after the REIT announced pricing of its underwritten public offering of 3,825,000 shares of its common stock at a price of $23.30 per share.

The company also offered the underwriters an option to purchase up to an additional 573,750 shares of common stock.

Equity One intends to use the net proceeds to fund development and redevelopment as well as to repay secured and unsecured debt.

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Separately, TheStreet Ratings team rates EQUITY ONE INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate EQUITY ONE INC (EQY) 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, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and poor profit margins."

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

  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.6%. Since the same quarter one year prior, revenues slightly increased by 4.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 107.2% when compared to the same quarter one year ago, falling from $33.41 million to -$2.41 million.
  • The gross profit margin for EQUITY ONE INC is rather low; currently it is at 17.69%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -2.71% is significantly below that of the industry average.
  • You can view the full analysis from the report here: EQY Ratings Report

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