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NEW YORK (TheStreet) -- HMG Courtland Properties (HMG) has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate HMG COURTLAND PROPERTIES (HMG) a SELL. This is driven by multiple weaknesses, 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 feeble growth in its earnings per share and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HMG COURTLAND PROPERTIES's earnings per share declined by 24.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, HMG COURTLAND PROPERTIES reported poor results of -$1.16 versus -$0.88 in the prior year.
- Looking at the price performance of HMG's shares over the past 12 months, there is not much good news to report: the stock is down 26.00%, 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. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, HMG COURTLAND PROPERTIES's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 57.37% to -$0.16 million when compared to the same quarter last year. In addition, HMG COURTLAND PROPERTIES has also vastly surpassed the industry average cash flow growth rate of 6.64%.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 83.2% when compared to the same quarter one year prior, rising from -$1.95 million to -$0.33 million.
- You can view the full analysis from the report here: HMG Ratings Report