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. TheStreet Ratings quantitative algorithm evaluates over 4,300 stocks on a daily basis by 32 different data factors and assigns a unique buy, sell, or hold recommendation on each stock. Click here to learn more.
NEW YORK (TheStreet) -- Universal Security Instruments (UUU) 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 UNIVERSAL SECURITY INSTRUMENTS (UUU) 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 largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."
Must Read: Warren Buffett's 25 Favorite Stocks
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- UUU's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.55, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 195.37% to $0.91 million when compared to the same quarter last year. In addition, UNIVERSAL SECURITY INSTRUMNT has also vastly surpassed the industry average cash flow growth rate of -24.35%.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, UNIVERSAL SECURITY INSTRUMNT's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for UNIVERSAL SECURITY INSTRUMNT is rather low; currently it is at 24.78%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -29.55% is significantly below that of the industry average.
- You can view the full analysis from the report here: UUU Ratings Report