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NEW YORK (TheStreet) -- Old Second Bancorp (OSBC) has been upgraded by TheStreet Ratings from Sell to Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate OLD SECOND BANCORP INC (OSBC) 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 reasonable valuation levels, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has increased to $5.59 million or 33.61% when compared to the same quarter last year. In addition, OLD SECOND BANCORP INC/IL has also vastly surpassed the industry average cash flow growth rate of -67.79%.
- The gross profit margin for OLD SECOND BANCORP INC/IL is currently very high, coming in at 90.09%. Regardless of OSBC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OSBC's net profit margin of 11.45% is significantly lower than the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Banks industry. The net income has significantly decreased by 96.0% when compared to the same quarter one year ago, falling from $72.92 million to $2.92 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, OLD SECOND BANCORP INC/IL underperformed against that of the industry average and is significantly less than that of the S&P 500.
- You can view the full analysis from the report here: OSBC Ratings Report