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Meadowbrook Insurance Group Inc. Stock Downgraded (MIG)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Meadowbrook Insurance Group (NYSE: MIG) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:

  • MIG, with its decline in revenue, underperformed when compared the industry average of 17.7%. Since the same quarter one year prior, revenues fell by 11.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Insurance industry average. The net income has decreased by 12.6% when compared to the same quarter one year ago, dropping from $8.10 million to $7.08 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, MEADOWBROOK INS GROUP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
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Meadowbrook Insurance Group, Inc. operates as a commercial insurance underwriter and insurance administration services company in the United States. The company markets and underwrites specialty property and casualty insurance programs and products on an admitted and non-admitted basis. The company has a P/E ratio of 32.9, above the S&P 500 P/E ratio of 17.7. Meadowbrook Insurance Group has a market cap of $377.6 million and is part of the financial sector and insurance industry. Shares are up 31% year to date as of the close of trading on Wednesday.

You can view the full Meadowbrook Insurance Group Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

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