NEW YORK (TheStreet) -- Shares of Ametek (AME) were falling 4.4% to $49.94 with heavy trading volume Thursday following the release of a report from short-seller Spruce Point Capital Management, according to Bloomberg.
In the report Spruce Point questioned the electric motor manufacturer's profits margins and reported earnings. Spruce Point said Ametek's EBITDA may be overstated by 400 to 600 basis points, and the company may have inventory accounting issues.
Ametek may have used "highly suspect and aggressive accounting" and frequent acquisitions to bolster its margins and earnings, according to Spruce Point's report. The short-seller said that "with limited growth, Ametek is under pressure as its strategy appears to be hitting a brick wall."
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TheStreet Ratings team rates AMETEK INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate AMETEK INC (AME) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins."