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NEW YORK (TheStreet) -- Sutor Technology Group (SUTR) 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 SUTOR TECHNOLOGY GROUP LTD (SUTR) a SELL. This is driven by some concerns, 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, poor profit margins, weak operating cash flow and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SUTOR TECHNOLOGY GROUP LTD 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, SUTOR TECHNOLOGY GROUP LTD reported lower earnings of $0.18 versus $0.43 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 Metals & Mining industry. The net income has significantly decreased by 198.1% when compared to the same quarter one year ago, falling from $5.19 million to -$5.09 million.
- The gross profit margin for SUTOR TECHNOLOGY GROUP LTD is currently extremely low, coming in at 0.78%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -13.40% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$58.24 million or 591.92% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 67.59%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 192.30% compared to 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.
- You can view the full analysis from the report here: SUTR Ratings Report