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NEW YORK (

TheStreet

)

-- SeaBright Holdings

(NYSE:

SBX

) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, feeble growth in its earnings per share and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Insurance industry. The net income has decreased by 1.8% when compared to the same quarter one year ago, dropping from -$15.53 million to -$15.81 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, SEABRIGHT HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • SEABRIGHT HOLDINGS INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, SEABRIGHT HOLDINGS INC swung to a loss, reporting -$0.10 versus $0.63 in the prior year. For the next year, the market is expecting a contraction of 530.0% in earnings (-$0.63 versus -$0.10).
  • Looking at the price performance of SBX's shares over the past 12 months, there is not much good news to report: the stock is down 31.02%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The revenue fell significantly faster than the industry average of 20.7%. Since the same quarter one year prior, revenues fell by 10.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

SeaBright Holdings, Inc., through its subsidiaries, provides multi-jurisdictional workers' compensation insurance for maritime customers, state act customers, and employers in the construction industry. SeaBright has a market cap of $130.7 million and is part of the

TheStreet Recommends

financial

sector and

insurance

industry. Shares are down 41.9% year to date as of the close of trading on Thursday.

You can view the full

SeaBright Ratings Report

or get investment ideas from our

investment research center

.

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