NEW YORK (TheStreet) -- Navigators Group (Nasdaq:NAVG) 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, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. Highlights from the ratings report include:
- NAVG's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- Net operating cash flow has increased to $71.94 million or 44.59% when compared to the same quarter last year. In addition, NAVIGATORS GROUP INC has also vastly surpassed the industry average cash flow growth rate of -13.95%.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 7.0%. Since the same quarter one year prior, revenues slightly dropped by 0.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- NAVIGATORS GROUP INC's earnings per share declined by 8.0% in the most recent quarter compared to 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, NAVIGATORS GROUP INC increased its bottom line by earning $4.23 versus $3.69 in the prior year. For the next year, the market is expecting a contraction of 63.3% in earnings ($1.55 versus $4.23).
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