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"We rate C&F FINANCIAL CORP (CFFI) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 4.8%. Since the same quarter one year prior, revenues slightly increased by 4.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has slightly increased to $9.01 million or 2.57% when compared to the same quarter last year. In addition, C&F FINANCIAL CORP has also vastly surpassed the industry average cash flow growth rate of -67.79%.
- The gross profit margin for C&F FINANCIAL CORP is currently very high, coming in at 76.36%. Regardless of CFFI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CFFI's net profit margin of 12.44% is significantly lower than the industry average.
- 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 Commercial Banks industry and the overall market on the basis of return on equity, C&F FINANCIAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Looking at the price performance of CFFI's shares over the past 12 months, there is not much good news to report: the stock is down 25.64%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.
- You can view the full analysis from the report here: CFFI Ratings Report