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NEW YORK (TheStreet) -- Turquoise Hill Resources (TRQ) has been upgraded by TheStreet Ratings from Sell to Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate TURQUOISE HILL RESOURCES LTD (TRQ) 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 robust revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TRQ's very impressive revenue growth greatly exceeded the industry average of 0.7%. Since the same quarter one year prior, revenues leaped by 7123.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- TURQUOISE HILL RESOURCES LTD 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, TURQUOISE HILL RESOURCES LTD continued to lose money by earning -$0.05 versus -$0.37 in the prior year.
- TRQ's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.37 is very weak and demonstrates a lack of ability to pay short-term obligations.
- In its most recent trading session, TRQ has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The gross profit margin for TURQUOISE HILL RESOURCES LTD is currently lower than what is desirable, coming in at 33.82%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, TRQ's net profit margin of 2.15% is significantly lower than the industry average.
- You can view the full analysis from the report here: TRQ Ratings Report
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