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NEW YORK (TheStreet) -- NF Energy Saving (NFEC has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate NF ENERGY SAVING CORP (NFEC) a SELL. This is driven by some concerns, 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 feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- NF ENERGY SAVING CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, NF ENERGY SAVING CORP swung to a loss, reporting -$0.03 versus $0.01 in the prior year.
- 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 Machinery industry. The net income has significantly decreased by 819.2% when compared to the same quarter one year ago, falling from $0.05 million to -$0.37 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Machinery industry and the overall market, NF ENERGY SAVING CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for NF ENERGY SAVING CORP is rather low; currently it is at 19.54%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -23.41% is significantly below that of the industry average.
- Net operating cash flow has declined marginally to $0.71 million or 0.42% when compared to the same quarter last year. Despite a decrease in cash flow NF ENERGY SAVING CORP is still fairing well by exceeding its industry average cash flow growth rate of -24.29%.
- You can view the full analysis from the report here: NFEC Ratings Report