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"We rate HANDY & HARMAN LTD (HNH) a SELL. This is driven by some concerns, 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. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally high debt management risk."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for HANDY & HARMAN LTD is currently lower than what is desirable, coming in at 30.29%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.28% trails that of the industry average.
- The debt-to-equity ratio is very high at 2.27 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, HNH has managed to keep a strong quick ratio of 1.59, which demonstrates the ability to cover short-term cash needs.
- HANDY & HARMAN LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, HANDY & HARMAN LTD increased its bottom line by earning $2.12 versus $1.71 in the prior year.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Metals & Mining industry average. The net income increased by 23.0% when compared to the same quarter one year prior, going from $9.64 million to $11.86 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, HANDY & HARMAN LTD's return on equity significantly exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: HNH Ratings Report