Validus Holdings Inc. Stock Upgraded (VR)

NEW YORK (TheStreet) -- Validus Holdings (NYSE:VR) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:

• VR's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
• VR, with its decline in revenue, slightly underperformed the industry average of 7.0%. Since the same quarter one year prior, revenues fell by 11.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
• In its most recent trading session, VR 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. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
• The gross profit margin for VALIDUS HOLDINGS LTD is currently lower than what is desirable, coming in at 34.60%. It has decreased significantly from the same period last year. Regardless of the weak results of the gross profit margin, the net profit margin of 12.20% is above that of the industry average.

Validus Holdings, Ltd., through its subsidiaries, provides reinsurance and insurance coverage in the property, marine, and specialty lines markets worldwide. The company has a P/E ratio of 35.8, below the average insurance industry P/E ratio of 39.2 and above the S&P 500 P/E ratio of 17.7. Validus has a market cap of $2.8 billion and is part of the financial sector and insurance industry. Shares are down 6% year to date as of the close of trading on Friday.

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For more information on Validus Holdings Inc. click any of the following:

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• Validus Holdings Inc. Growth Rates

• Validus Holdings Inc. Balance Sheet

• Validus Holdings Inc. Cash Flow

• Validus Holdings Inc. Income Statement