TheStreet.com Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking total return performance.
TheStreet.com's stock-rating model upgraded insurer Arch Capital Group (ACGL) to "buy."
The numbers: First-quarter revenue decreased 13% to $760 million as net income declined 25% to $146 million. Earnings per share fell 19% to $2.24 because of a lower share count. The operating margin dropped from 29% to 19% and the net margin fell from 22% to 19%. The company has an ideal financial position, with over $1.2 billion of cash reserves and just $400 million of debt. We give Arch a financial strength score of 8.5 out of 10.
The stock: Arch is down 10% this year, underperforming the Dow Jones Industrial Average and the S&P 500 Index. The stock trades at an expensive price-to-earnings ratio of 20. The company doesn't pay dividends.The model upgraded Norfolk Southern (NSC) to "buy." The railroad operator transports freight by train. The numbers: First-quarter revenue declined 22% to $1.9 billion as net income dropped 39% to $177 million. Earnings per share fell 38% to 47 cents, helped by a lower share count. The operating margin decreased from 24% to 20% and the net margin fell from 12% to 9%. A quick ratio of 0.9 indicates a less-than-ideal liquidity position. But Norfolk Southern has more than doubled its cash reserves to $884 million from the year-ago quarter. And a debt-to-equity ratio of 0.7 demonstrates reasonable leverage. The stock: Norfolk Southern has climbed 19% this year, outperforming the Dow and S&P 500. The stock trades at a cheap price-to-earnings ratio of 10 and offers an attractive 3.1% dividend yield.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV