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NEW YORK (TheStreet) -- California First National Bancorp (CFNB) 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 CALIF FIRST NATIONAL BANCORP (CFNB) 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 revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 10.0%. Since the same quarter one year prior, revenues rose by 21.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Although CFNB's debt-to-equity ratio of 0.08 is very low, it is currently higher than that of the industry average.
- The gross profit margin for CALIF FIRST NATIONAL BANCORP is currently very high, coming in at 85.55%. Regardless of CFNB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CFNB's net profit margin of 31.50% significantly outperformed against the industry.
- CFNB has underperformed the S&P 500 Index, declining 5.69% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- 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 Diversified Financial Services industry and the overall market on the basis of return on equity, CALIF FIRST NATIONAL BANCORP 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: CFNB Ratings Report