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NEW YORK (TheStreet) -- Jinpan International (JST) has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate JINPAN INTERNATIONAL LTD (JST) 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, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and disappointing return on equity."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- JST's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, JST has a quick ratio of 1.91, which demonstrates the ability of the company to cover short-term liquidity needs.
- 36.19% is the gross profit margin for JINPAN INTERNATIONAL LTD which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.91% trails the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Electrical Equipment industry. The net income has significantly decreased by 38.8% when compared to the same quarter one year ago, falling from $6.98 million to $4.27 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. In comparison to the other companies in the Electrical Equipment industry and the overall market, JINPAN INTERNATIONAL LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: JST Ratings Report