NEW YORK (TheStreet) -- Manchester United (MANU) shares are down 9.5% to $14.94 in early market trading on Tuesday after part owner Edward Glazer put up 3 million class A shares of the English football club for sale in a deal that could net him more than $50 million. The shares represent about 15% of Glazer's total stake in the club.
Edward is one of six of Malcolm Glazer's children -- Malcolm Glazer died earlier this year at the age of 86 -- who own an equal piece of the team.
Edward's sale brings the Glazer family's total controlling stake in the team down to about 80% from 83%.
TheStreet Ratings team rates MANCHESTER UNITED PLC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate MANCHESTER UNITED PLC (MANU) 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 increase in net income, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 3160.5% when compared to the same quarter one year prior, rising from -$0.47 million to $14.51 million.
- Net operating cash flow has significantly increased by 215.37% to $118.26 million when compared to the same quarter last year. In addition, MANCHESTER UNITED PLC has also vastly surpassed the industry average cash flow growth rate of 16.29%.
- The debt-to-equity ratio is somewhat low, currently at 0.73, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.49 is very weak and demonstrates a lack of ability to pay short-term obligations.
- 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. When compared to other companies in the Media industry and the overall market, MANCHESTER UNITED PLC's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for MANCHESTER UNITED PLC is rather low; currently it is at 21.92%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 10.08% trails that of the industry average.
- You can view the full analysis from the report here: MANU Ratings Report