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NEW YORK (TheStreet) -- Taitron Components (TAIT) 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 TAITRON COMPONENTS (TAIT) a SELL. This is driven by a number of negative factors, 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 disappointing return on equity, 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'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 Electronic Equipment, Instruments & Components industry and the overall market, TAITRON COMPONENTS's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for TAITRON COMPONENTS is currently lower than what is desirable, coming in at 33.19%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, TAIT's net profit margin of -8.51% significantly underperformed when compared to the industry average.
- TAIT has underperformed the S&P 500 Index, declining 8.50% from its price level of one year ago. 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.
- TAITRON COMPONENTS has improved earnings per share by 25.0% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, TAITRON COMPONENTS reported poor results of -$0.16 versus -$0.14 in the prior year.
- TAIT, with its decline in revenue, slightly underperformed the industry average of 5.6%. Since the same quarter one year prior, revenues slightly dropped by 3.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: TAIT Ratings Report