United Security Bancshares (USBI) Downgraded From Buy to Hold

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.  TheStreet Ratings quantitative algorithm evaluates over 4,300 stocks on a daily basis by 32 different data factors and assigns a unique buy, sell, or hold recommendation on each stock.  Click here to learn more.

NEW YORK (TheStreet) -- United Security Bancshares  (USBI) 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 UNITED SEC BANCSHARES INC (USBI) 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 attractive valuation levels, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The gross profit margin for UNITED SEC BANCSHARES INC is currently very high, coming in at 93.53%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, USBI's net profit margin of 9.21% significantly trails the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • 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. When compared to other companies in the Commercial Banks industry and the overall market, UNITED SEC BANCSHARES INC's return on equity is below that of both the industry average and the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Commercial Banks industry average. The net income has decreased by 7.4% when compared to the same quarter one year ago, dropping from $0.90 million to $0.84 million.
  • You can view the full analysis from the report here: USBI Ratings Report

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE.

More from Markets

Stocks Fall Hard as Earnings Disappoint, Caterpillar Tumbles

Stocks Fall Hard as Earnings Disappoint, Caterpillar Tumbles

Jim Cramer: If You're Afraid of the 10-Year Yield, Go to Cash

Jim Cramer: If You're Afraid of the 10-Year Yield, Go to Cash

Eli Lilly CEO Expresses Confidence in New Rheumatoid Arthritis Drug

Eli Lilly CEO Expresses Confidence in New Rheumatoid Arthritis Drug

Video: Jim Cramer on Rising Interest Rates, Trade Worries & Caterpillar

Video: Jim Cramer on Rising Interest Rates, Trade Worries & Caterpillar

Apple Suppliers Slide After European, Asian Chipmakers Echo Smartphone Concerns

Apple Suppliers Slide After European, Asian Chipmakers Echo Smartphone Concerns