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NEW YORK (TheStreet) -- Golden Enterprises (GLDC) 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 GOLDEN ENTERPRISES (GLDC) 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 expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for GOLDEN ENTERPRISES is rather high; currently it is at 53.07%. 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 2.24% trails the industry average.
- The current debt-to-equity ratio, 0.40, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
- GLDC, with its decline in revenue, slightly underperformed the industry average of 1.7%. Since the same quarter one year prior, revenues slightly dropped by 2.9%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- 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 Food Products industry and the overall market, GOLDEN ENTERPRISES's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $0.74 million or 39.61% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: GLDC Ratings Report