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"We rate LOJACK CORP (LOJN) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow 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 228.6% when compared to the same quarter one year ago, falling from $2.64 million to -$3.39 million.
- Net operating cash flow has significantly decreased to -$1.93 million or 112.54% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- In its most recent trading session, LOJN 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, LOJACK CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- 49.55% is the gross profit margin for LOJACK CORP which we consider to be strong. Regardless of LOJN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LOJN's net profit margin of -9.84% significantly underperformed when compared to the industry average.
- You can view the full analysis from the report here: LOJN Ratings Report