Quality Distribution (QLTY) Downgraded From Hold to Sell

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NEW YORK (TheStreet) -- Quality Distribution  (QLTY) 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:

TheStreet Ratings team rates QUALITY DISTRIBUTION INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate QUALITY DISTRIBUTION INC (QLTY) 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. Among the areas we feel are negative, one of the most important has been poor profit margins."

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Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The gross profit margin for QUALITY DISTRIBUTION INC is currently extremely low, coming in at 10.71%. QLTY has continued with the weak profit margin when compared to the same quarter of last year. Despite the mixed results of the gross profit margin, QLTY's net profit margin of 1.38% is significantly lower than the industry average.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • QUALITY DISTRIBUTION INC has improved earnings per share by 30.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, QUALITY DISTRIBUTION INC swung to a loss, reporting -$1.59 versus $1.83 in the prior year. This year, the market expects an improvement in earnings ($0.75 versus -$1.59).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Road & Rail industry average. The net income increased by 29.4% when compared to the same quarter one year prior, rising from $2.76 million to $3.57 million.
  • QLTY's revenue growth has slightly outpaced the industry average of 9.7%. Since the same quarter one year prior, revenues slightly increased by 9.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

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