CNA Financial Corp Stock Upgraded (CNA)

NEW YORK (TheStreet) -- CNA Financial (NYSE:CNA) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

• The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 153.6% when compared to the same quarter one year prior, rising from -$140.00 million to $75.00 million.
• CNA's debt-to-equity ratio is very low at 0.22 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 significantly increased by 131.97% to $401.00 million when compared to the same quarter last year. In addition, CNA FINANCIAL CORP has also vastly surpassed the industry average cash flow growth rate of -13.95%.
• After a year of stock price fluctuations, the net result is that CNA's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

CNA Financial Corporation, through its subsidiaries, provides property and casualty insurance products to small, middle-market, and large businesses and organizations primarily in the United States, Europe, Canada, and Hawaii. The company has a P/E ratio of 10.3, equal to the average insurance industry P/E ratio and below the S&P 500 P/E ratio of 17.7. CNA Financial has a market cap of $7.41 billion and is part of the financial sector and insurance industry. Shares are up 2.8% year to date as of the close of trading on Friday.

You can view the full CNA Financial Ratings Report or get investment ideas from our investment research center.

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