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NEW YORK (TheStreet) -- Resource America (REXI) 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 RESOURCE AMERICA INC (REXI) a SELL. This is driven by a number of negative factors, 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 unimpressive growth in net income, generally high debt management risk, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 Diversified Financial Services industry. The net income has significantly decreased by 56.0% when compared to the same quarter one year ago, falling from $3.44 million to $1.52 million.
- The debt-to-equity ratio is very high at 9.79 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- Net operating cash flow has decreased to $46.93 million or 16.80% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- In its most recent trading session, REXI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
- RESOURCE AMERICA 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. This year, the market expects an improvement in earnings ($0.57 versus $0.29).
- You can view the full analysis from the report here: REXI Ratings Report