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"We rate SERVOTRONICS INC (SVT) a SELL. This is driven by several 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, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SERVOTRONICS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, SERVOTRONICS INC reported lower earnings of $0.43 versus $0.77 in the prior year.
- 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 Electrical Equipment industry. The net income has significantly decreased by 1022.1% when compared to the same quarter one year ago, falling from $0.36 million to -$3.30 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 Electrical Equipment industry and the overall market, SERVOTRONICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for SERVOTRONICS INC is rather low; currently it is at 23.73%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -41.10% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to $0.36 million or 52.06% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: SVT Ratings Report