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 (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A . 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 increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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Highlights from the ratings report include:
- CI's revenue growth has slightly outpaced the industry average of 26.6%. Since the same quarter one year prior, revenues rose by 35.4%. 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.
- The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels.
- Net operating cash flow has significantly increased by 77.27% to $936.00 million when compared to the same quarter last year. In addition, CIGNA CORP has also vastly surpassed the industry average cash flow growth rate of -78.10%.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
CIGNA Corporation, a health services organization, through its subsidiaries, provides insurance and related products and services in the United States and internationally. Cigna has a market cap of $14.51 billion and is part of the health care sector and health services industry. The company has a P/E ratio of 11.2, below the S&P 500 P/E ratio of 17.7. Shares are up 18.7% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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