Hamilton Bancorp (HBK) Downgraded From Hold to Sell

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) -- Hamilton Bancorp  (HBK) 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 HAMILTON BANCORP INC/MD (HBK) a SELL. This is driven by a few notable 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 disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."

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 company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, HAMILTON BANCORP INC/MD's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $1.38 million or 67.17% 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.
  • HBK has underperformed the S&P 500 Index, declining 8.96% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • HAMILTON BANCORP INC/MD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, HAMILTON BANCORP INC/MD reported poor results of -$0.35 versus -$0.11 in the prior year.
  • Despite the weak revenue results, HBK has outperformed against the industry average of 20.5%. Since the same quarter one year prior, revenues slightly dropped by 4.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: HBK 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

Tuesday Turnaround: Google Gets Grilled

Tuesday Turnaround: Google Gets Grilled

Nvidia Shares Fall as SoftBank Reportedly Plans to Sell Its Stake

Nvidia Shares Fall as SoftBank Reportedly Plans to Sell Its Stake

Stocks End Mixed as China Trade Progress Offsets D.C. Dysfunction

Stocks End Mixed as China Trade Progress Offsets D.C. Dysfunction

Market Madness: This Market Is for Stock Pickers

Market Madness: This Market Is for Stock Pickers

Jim Cramer: The Operative Term for This Tape Is Treacherous

Jim Cramer: The Operative Term for This Tape Is Treacherous