RECOMMENDATION We rate JER INVESTORS TRUST INC (JRT) 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 weak debt management, disappointing return on equity and weak operating cash flow. HIGHLIGHTS JER INVESTORS TRUST INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, JER INVESTORS TRUST INC reported lower earnings of $0.90 versus $1.23 in the prior year. For the next year, the market is expecting a contraction of 358.9% in earnings (-$2.33 versus $0.90). 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 431.1% when compared to the same quarter one year ago, falling from $10.52 million to -$34.85 million. The debt-to-equity ratio is very high at 2.15 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. 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, JER INVESTORS TRUST INC's return on equity significantly trails that of both the industry average and the S&P 500. Net operating cash flow has decreased to $9.73 million or 26.41% 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.