NEW YORK (
-- Alterra Capital Holdings
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and expanding profit margins. 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:
- 39.40% is the gross profit margin for ALTERRA CAPITAL HOLDINGS LTD which we consider to be strong. Regardless of ALTE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ALTE's net profit margin of 19.20% compares favorably to the industry average.
- Net operating cash flow has significantly increased by 345.65% to $139.28 million when compared to the same quarter last year. In addition, ALTERRA CAPITAL HOLDINGS LTD has also vastly surpassed the industry average cash flow growth rate of 6.40%.
- ALTE's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- ALTE's very impressive revenue growth greatly exceeded the industry average of 19.8%. Since the same quarter one year prior, revenues leaped by 54.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
Alterra Capital Holdings Limited, through its subsidiaries, provides specialty insurance and reinsurance products for the property and casualty market principally in Bermuda, Ireland, the United States, and the United Kingdom. Alterra has a market cap of $2.3 billion and is part of the
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