NEW YORK (TheStreet) -- Shares of Radian Group Inc. (RDN - Get Report) are higher 3.20% to $14.50 today after the company said its net income for the 2014 first quarter increased and that it's acquiring Clayton Holdings LLC.
The credit enhancement company said net income was $202.8 million, or 94 cents per diluted share, compared to a net loss of -$187.5 million, or -$1.30 per diluted share from the 2013 first quarter.
The company said it will purchase Clayton Holdings LLC for $305 million in order to enhance its presence in the private mortgage insurance industry, Reuters reported.
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TheStreet Ratings team rates RADIAN GROUP INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate RADIAN GROUP INC (RDN) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 2.0%. Since the same quarter one year prior, revenues rose by 20.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The gross profit margin for RADIAN GROUP INC is currently lower than what is desirable, coming in at 28.16%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, RDN's net profit margin of 13.39% compares favorably to the industry average.
- Net operating cash flow has decreased to -$97.30 million or 41.55% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: RDN Ratings Report