16 Risky Micro-Cap Stocks to Avoid Despite Their Tasty Dividends

NEW YORK (TheStreet) -- Small-cap stocks with large dividends may look enticing but not every stock is a buy.

In stock picking, dividend yield is just one factor among many that investors should consider. The stocks on this list are all small-cap companies rated sell with D+ ratings or worse, yet have high dividend yields, according to TheStreet Ratings, TheStreet's proprietary ratings tool.

TheStreet Ratings projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

Check out which small-cap high-dividend yielding stocks you should stay away from. And when you're done be sure to read about which large-cap stocks with big dividends you should also sell. Year-to-date returns are based on March 26, 2015 closing prices.

IFMI Chart IFMI data by YCharts

1. Institutional Financial Markets (IFMI)
Rating: Sell, D
Industry: Financial Services/Diversified Capital Markets
Market Cap: $23.2 million
Annual Dividend Yield: 5.03%
Year-to-date return: -9.7%

Institutional Financial Markets, Inc. is a publicly owned investment manager. The firm primarily provides its services to individuals and institutions. It manages separate client-focused fixed income portfolios. Institutional Financial Markets, Inc.

"We rate INSTITUTIONAL FINANCIAL MKTS (IFMI) 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 generally disappointing historical performance in the stock itself and poor profit margins."

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

  • IFMI's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 26.05%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • The gross profit margin for INSTITUTIONAL FINANCIAL MKTS is currently lower than what is desirable, coming in at 25.19%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 16.26% trails the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Capital Markets industry and the overall market, INSTITUTIONAL FINANCIAL MKTS's return on equity significantly trails that of both the industry average and the S&P 500.
  • INSTITUTIONAL FINANCIAL MKTS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, INSTITUTIONAL FINANCIAL MKTS continued to lose money by earning -$0.17 versus -$1.09 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 172.1% when compared to the same quarter one year prior, rising from -$4.01 million to $2.89 million.

 

 

EEI Chart EEI data by YCharts

2. Ecology and Environment Inc. (EEI)
Rating: Sell, D+
Industry: Industrials/Environmental & Facilities Services
Market Cap: $38 million
Annual Dividend Yield: 5.30%
Year-to-date return: -3.1%

Eology and Environment, Inc., an environmental consulting firm, provides professional services to the government and private sectors worldwide.

"We rate ECOLOGY AND ENVIRONMENT INC (EEI) 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 weak operating cash flow and generally disappointing historical performance in the stock itself."

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

  • Net operating cash flow has significantly decreased to $2.26 million or 53.60% 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, EEI 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.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Commercial Services & Supplies industry average, but is greater than that of the S&P 500. The net income increased by 80.6% when compared to the same quarter one year prior, rising from -$0.78 million to -$0.15 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Commercial Services & Supplies industry and the overall market, ECOLOGY AND ENVIRONMENT INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • 42.34% is the gross profit margin for ECOLOGY AND ENVIRONMENT INC which we consider to be strong. Regardless of EEI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EEI's net profit margin of -0.53% significantly underperformed when compared to the industry average.

 

BDMS Chart BDMS data by YCharts

3. Birner Dental Management Services Inc. (BDMS)
Rating: Sell, D+
Industry: Health Care/Health Care Services
Market Cap: $26.8 million
Annual Dividend Yield: 6.11%
Year-to-date return: -4%

Birner Dental Management Services, Inc. provides business services to dental group practices in Colorado, New Mexico, and Arizona.

"We rate BIRNER DENTAL MGMT SVCS INC (BDMS) a SELL. This is driven by multiple 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 feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and poor profit margins."

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

  • The debt-to-equity ratio is very high at 2.26 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.50, which clearly demonstrates the inability to cover short-term cash needs.
  • 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. Compared to other companies in the Health Care Providers & Services industry and the overall market, BIRNER DENTAL MGMT SVCS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for BIRNER DENTAL MGMT SVCS INC is rather low; currently it is at 20.94%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.50% trails that of the industry average.
  • Net operating cash flow has significantly decreased to $0.12 million or 88.13% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • BIRNER DENTAL MGMT SVCS INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, BIRNER DENTAL MGMT SVCS INC reported lower earnings of $0.05 versus $0.45 in the prior year.

 

 

WLT Chart WLT data by YCharts

4. Walter Energy Inc. (WLT)
Rating: Sell, D
Industry: Materials/Steel
Market Cap: $40.1 million
Annual Dividend Yield: 6.55%
Year-to-date return: -56%

Walter Energy, Inc. produces and exports metallurgical coal for the steel industry. It operates through two segments, U.S. Operations, and Canadian and U.K. Operations.

"We rate WALTER ENERGY INC (WLT) a SELL. This is driven by multiple 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, generally disappointing historical performance in the stock itself and generally high debt management risk."

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

  • 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. Compared to other companies in the Metals & Mining industry and the overall market, WALTER ENERGY INC'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 -$118.92 million or 801.58% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • WLT's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 93.29%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • The debt-to-equity ratio is very high at 11.14 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, WLT has managed to keep a strong quick ratio of 1.63, which demonstrates the ability to cover short-term cash needs.
  • WLT, with its decline in revenue, underperformed when compared the industry average of 18.7%. Since the same quarter one year prior, revenues fell by 39.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

 

CCUR Chart CCUR data by YCharts

5. Concurrent Computer Corp. (CCUR)
Rating: Sell, D
Industry: Technology
Market Cap: $58.7 million
Annual Dividend Yield: 6.85%
Year-to-date return: 9.5%

Concurrent Computer Corporation provides software, hardware, and professional services for the multi-screen video and real-time markets in North America, the Asia Pacific, Europe, and South America. It operates through two segments, Products and Services.

"We rate CONCURRENT COMPUTER CP (CCUR) 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 unimpressive growth in net income, 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 Computers & Peripherals industry. The net income has significantly decreased by 152.4% when compared to the same quarter one year ago, falling from $1.09 million to -$0.57 million.
  • Net operating cash flow has decreased to $0.55 million or 45.49% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The share price of CONCURRENT COMPUTER CP has not done very well: it is down 17.36% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
  • CONCURRENT COMPUTER CP 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 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, CONCURRENT COMPUTER CP increased its bottom line by earning $2.04 versus $0.49 in the prior year.
  • The revenue fell significantly faster than the industry average of 31.7%. Since the same quarter one year prior, revenues fell by 10.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

 

 

DXR Chart DXR data by YCharts

6. Daxor Corp. (DXR)
Rating: Sell, D+
Industry: Health Care/Health Care Equipment
Market Cap: $22.5 million
Annual Dividend Yield: 7.10%
Year-to-date return: -18.6%

Daxor Corporation, a medical device company, provides biotechnology and cryobanking services in the United States. The company offers BVA-100 Blood Volume Analyzer, an instrument that measures blood volume in human body.

"We rate DAXOR CORP (DXR) 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 feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself."

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

  • DAXOR CORP 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 suffered a declining pattern earnings per share over the past two years. During the past fiscal year, DAXOR CORP swung to a loss, reporting -$1.69 versus $1.17 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 165.8% when compared to the same quarter one year ago, falling from $2.27 million to -$1.49 million.
  • 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. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, DAXOR CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 31.93%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 166.03% 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.
  • The gross profit margin for DAXOR CORP is currently very high, coming in at 71.27%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -404.33% is in-line with the industry average.

 

RNO Chart RNO data by YCharts

7. Rhino Resources Partners (RNO)
Rating: Sell, D
Industry: Energy/Coal & Consumable Fuels
Market Cap: $70 million
Annual Dividend Yield: 8.47%
Year-to-date return: 3.6%

Rhino Resource Partners LP, together with its subsidiaries, produces, processes, and sells various grades of steam and metallurgical coal from surface and underground mines in the United States.

"We rate RHINO RESOURCE PARTNERS LP (RNO) 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 unimpressive growth in net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 7578.5% when compared to the same quarter one year ago, falling from $0.82 million to -$61.32 million.
  • 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, RHINO RESOURCE PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 81.50%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 10450.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • RHINO RESOURCE PARTNERS LP 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, RHINO RESOURCE PARTNERS LP swung to a loss, reporting -$2.77 versus $0.28 in the prior year. This year, the market expects an improvement in earnings (-$0.85 versus -$2.77).
  • Despite the weak revenue results, RNO has outperformed against the industry average of 19.6%. Since the same quarter one year prior, revenues slightly dropped by 1.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

 

 

KOSS Chart KOSS data by YCharts

8. Koss Corp. (KOSS)
Rating: Sell, D+
Industry: Consumer Goods & Services/Consumer Electronics
Market Cap: $17 million
Annual Dividend Yield: 9.63%
Year-to-date return: 35.4%

Koss Corporation designs, manufactures, and sells stereo headphones and related accessory products worldwide.

"We rate KOSS CORP (KOSS) 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 and generally disappointing historical performance in the stock itself."

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

  • 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. Compared to other companies in the Household Durables industry and the overall market, KOSS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • KOSS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 46.57%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • KOSS CORP 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, KOSS CORP swung to a loss, reporting -$0.75 versus $0.74 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Durables industry. The net income increased by 104.8% when compared to the same quarter one year prior, rising from -$3.45 million to $0.17 million.
  • 36.61% is the gross profit margin for KOSS CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 2.35% is above that of the industry average.

 

DSWL Chart DSWL data by YCharts

9. Deswell Industries Inc. (DSWL)
Rating: Sell, D+
Industry: Technology/Electronic Manufacturing Services
Market Cap: $30.7 million
Annual Dividend Yield: 10.47%
Year-to-date return: 5.6%

Deswell Industries, Inc. manufactures and sells injection-molded plastic parts and components, electronic products, assembling, and metallic parts for original equipment manufacturers and contract manufacturers.

"We rate DESWELL INDUSTRIES INC (DSWL) 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 disappointing return on equity, poor profit margins, 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'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 Electronic Equipment, Instruments & Components industry and the overall market, DESWELL INDUSTRIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for DESWELL INDUSTRIES INC is rather low; currently it is at 15.05%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -10.45% is significantly below that of the industry average.
  • Net operating cash flow has declined marginally to -$0.22 million or 4.18% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, DESWELL INDUSTRIES INC has marginally lower results.
  • DSWL has underperformed the S&P 500 Index, declining 15.12% 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.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Electronic Equipment, Instruments & Components industry average, but is greater than that of the S&P 500. The net income increased by 20.3% when compared to the same quarter one year prior, going from -$1.42 million to -$1.13 million.

 

DRD Chart DRD data by YCharts

10. DRDGOLD Limited (DRD)
Rating: Sell, D+
Industry: Materials/Gold
Market Cap: $66.7 million
Annual Dividend Yield: 14.12%
Year-to-date return: 10.3%

DRDGOLD Limited is engaged in exploring, mining, extracting, processing, and smelting gold deposits in South Africa.

"We rate DRDGOLD LTD (DRD) 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 poor profit margins and generally disappointing historical performance in the stock itself."

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

  • The gross profit margin for DRDGOLD LTD is currently extremely low, coming in at 14.93%. Regardless of DRD's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, DRD's net profit margin of -0.62% significantly underperformed when compared to the industry average.
  • DRD's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 58.77%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, DRDGOLD LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Despite the weak revenue results, DRD has outperformed against the industry average of 18.7%. Since the same quarter one year prior, revenues slightly dropped by 3.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • DRD's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.92 is somewhat weak and could be cause for future problems.

 

WHLR Chart WHLR data by YCharts

11. Wheeler Real Estate Investment Trust Inc. (WHLR)
Rating: Sell, D-
Industry: Financial Services/Retail REITs
Market Cap: $18 million
Annual Dividend Yield: 15.49%
Year-to-date return: -42%

Wheeler Real Estate Investment Trust, Inc. engages in acquiring, financing, developing, leasing, owning, and managing real estate properties in the mid-Atlantic, southeast, and southwest United States.

"We rate WHEELER REAL ESTATE INVT TR (WHLR) 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 deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 1617.4% when compared to the same quarter one year ago, falling from -$0.24 million to -$4.05 million.
  • 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. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, WHEELER REAL ESTATE INVT TR's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 36.24%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1650.00% 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.
  • WHEELER REAL ESTATE INVT TR 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, WHEELER REAL ESTATE INVT TR reported poor results of -$1.80 versus -$0.94 in the prior year. This year, the market expects an improvement in earnings (-$0.75 versus -$1.80).
  • WHLR's very impressive revenue growth greatly exceeded the industry average of 10.1%. Since the same quarter one year prior, revenues leaped by 63.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.

 

 

FULL Chart FULL data by YCharts

12. Full Circle Capital Corp. (FULL)
Rating: Sell, D+
Industry: Financial Services/Asset Management & Custody Banks
Market Cap: $43 million
Annual Dividend Yield: 22.45%
Year-to-date return: -21.4%

Full Circle Capital Corporation is a business development company specializing in debt and equity securities of smaller and lower middle-market companies.

"We rate FULL CIRCLE CAPITAL CORP (FULL) 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 deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

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 Capital Markets industry. The net income has significantly decreased by 438.8% when compared to the same quarter one year ago, falling from -$1.22 million to -$6.57 million.
  • 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. Compared to other companies in the Capital Markets industry and the overall market, FULL CIRCLE CAPITAL CORP'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 $8.31 million or 54.54% 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 60.18%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 243.75% 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.
  • FULL CIRCLE CAPITAL CORP 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, FULL CIRCLE CAPITAL CORP swung to a loss, reporting -$0.83 versus $0.52 in the prior year. This year, the market expects an improvement in earnings ($0.64 versus -$0.83).

 

HMG Chart HMG data by YCharts


13. HMG/Courtland Properties Inc. (HMG)
Rating: Sell, D+
Industry: Financial Services/Retail REITs
Market Cap: $13 million
Annual Dividend Yield: 34.12%
Year-to-date return: 10.4%

HMG/Courtland Properties, Inc. operates as a real estate investment trust (REIT) in the United States. The company, together with its subsidiaries, engages in the ownership and management of commercial properties in the Coconut Grove section of Miami, Florida.

"We rate HMG COURTLAND PROPERTIES (HMG) a SELL. This is driven by several 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 feeble growth in its earnings per share and generally disappointing historical performance in the stock itself."

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

  • HMG COURTLAND PROPERTIES's earnings per share declined by 24.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, HMG COURTLAND PROPERTIES reported poor results of -$1.16 versus -$0.88 in the prior year.
  • Looking at the price performance of HMG's shares over the past 12 months, there is not much good news to report: the stock is down 28.89%, and it has underperformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, HMG COURTLAND PROPERTIES's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 57.37% to -$0.16 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 11.97%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 83.2% when compared to the same quarter one year prior, rising from -$1.95 million to -$0.33 million.

 

 

NSLP Chart NSLP data by YCharts

14. New Source Energy Partners LP (NSLP)
Rating: Sell, D
Industry: Energy/Oil & Gas Exploration & Production
Market Cap: $95 million
Annual Dividend Yield: 43.01%
Year-to-date return: -28.1%

New Source Energy Partners L.P. is engaged in the acquisition and development of oil and natural gas properties in the United States.

"We rate NEW SOURCE ENERGY PRTRS LP (NSLP) 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 unimpressive growth in net income 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 against the S&P 500 and did not exceed that of the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 50.9% when compared to the same quarter one year ago, falling from -$1.99 million to -$3.00 million.
  • NSLP's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 76.62%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, NEW SOURCE ENERGY PRTRS LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • NEW SOURCE ENERGY PRTRS LP has improved earnings per share by 22.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, NEW SOURCE ENERGY PRTRS LP increased its bottom line by earning $2.92 versus $0.14 in the prior year. For the next year, the market is expecting a contraction of 128.6% in earnings (-$0.84 versus $2.92).
  • 47.05% is the gross profit margin for NEW SOURCE ENERGY PRTRS LP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -5.31% trails the industry average.

 

NKA Chart NKA data by YCharts


15. Niska Gas Storage Partners (NKA)
Rating: Sell, D
Industry: Energy/Oil & Gas Storage & Transportation
Market Cap: $70.5 million
Annual Dividend Yield: 73.68%
Year-to-date return: -37.1%

Niska Gas Storage Partners LLC owns and operates natural gas storage assets in North America.

"We rate NISKA GAS STORAGE PARTNERS (NKA) a SELL. This is driven by multiple 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 deteriorating net income, generally high debt management risk, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 1836.2% when compared to the same quarter one year ago, falling from -$13.41 million to -$259.62 million.
  • The debt-to-equity ratio is very high at 3.62 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.16, which clearly demonstrates the inability to cover short-term cash needs.
  • 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, NISKA GAS STORAGE PARTNERS's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 86.24%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1751.35% 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.
  • NISKA GAS STORAGE PARTNERS 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 company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NISKA GAS STORAGE PARTNERS continued to lose money by earning -$0.24 versus -$0.63 in the prior year. For the next year, the market is expecting a contraction of 3295.8% in earnings (-$8.15 versus -$0.24).

 

LPHI Chart LPHI data by YCharts

16. Life Partners Holdings Inc. (LPHI)
Rating: Sell, D
Industry: Financial Services/Specialized Finance
Market Cap: $4.5 million
Annual Dividend Yield: 95.23%
Year-to-date return: -67%

Life Partners Holdings, Inc., through its subsidiary, Life Partners, Inc., operates in the secondary market for life insurance worldwide. It facilitates the sale of life settlements between sellers and purchasers, but does not take possession or control of the policies.

"We rate LIFE PARTNERS HOLDINGS INC (LPHI) a SELL. This is driven by several 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 and generally disappointing historical performance in the stock itself."

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

  • 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. Compared to other companies in the Diversified Financial Services industry and the overall market, LIFE PARTNERS HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • LPHI's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 91.07%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • LIFE PARTNERS HOLDINGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, LIFE PARTNERS HOLDINGS INC continued to lose money by earning -$0.13 versus -$0.16 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Financial Services industry. The net income increased by 214.8% when compared to the same quarter one year prior, rising from -$0.94 million to $1.08 million.
  • 44.41% is the gross profit margin for LIFE PARTNERS HOLDINGS INC which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 20.53% significantly outperformed against the industry average.

 

 

 

 

 

 

 

More from Investing

How to Be a Tactical Investor in the Current Market

How to Be a Tactical Investor in the Current Market

Canopy Growth CEO: Here's What the Future of Cannabis Looks Like for Investors

Canopy Growth CEO: Here's What the Future of Cannabis Looks Like for Investors

A Guide to Investing in the Fast-Emerging Cannabis Industry

A Guide to Investing in the Fast-Emerging Cannabis Industry

Canopy's CEO and Constellation Brands COO Discuss the Many Uses of Cannabis

Canopy's CEO and Constellation Brands COO Discuss the Many Uses of Cannabis

Kass: Tops Are a Process and Bottoms Are an Event

Kass: Tops Are a Process and Bottoms Are an Event