NEW YORK (TheStreet) -- Pulse Electronics (PULS) shares are down 32.7% to $1.52 on Friday after the company announced that it would delist its common stock from the New York Stock Exchange in a cost cutting move.
The electronic components and modules manufacturer's board believes that the savings it will incur voluntarily delisting from the NYSE far outweigh the benefits.
Some of the costs the company noted were legal and administrative burdens associated with SEC reporting obligations.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
TheStreet Ratings team rates PULSE ELECTRONICS CORP as a Sell with a ratings score of E+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PULSE ELECTRONICS CORP (PULS) a SELL. This is based on some significant below-par investment measures, which should drive this stock to significantly underperform the majority of stocks that we rate. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 49.3% when compared to the same quarter one year ago, falling from -$5.23 million to -$7.81 million.
- The gross profit margin for PULSE ELECTRONICS CORP is rather low; currently it is at 23.05%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.34% is significantly below that of the industry average.
- PULS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 45.75%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- PULSE ELECTRONICS CORP has improved earnings per share by 30.8% 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, PULSE ELECTRONICS CORP continued to lose money by earning -$3.39 versus -$6.60 in the prior year.
- Net operating cash flow has significantly increased by 187.37% to $6.65 million when compared to the same quarter last year. In addition, PULSE ELECTRONICS CORP has also vastly surpassed the industry average cash flow growth rate of -20.60%.
- You can view the full analysis from the report here: PULS Ratings Report