NEW YORK (TheStreet) -- Shares of Genworth Financial (GNW) - Get Report were falling 9.9% to $4.95 on Friday after the insurance company announced the resignation of CFO Martin Klein, effective October 15.
Martin resigned to take a senior leadership role at another financial service company, but will remain with Genworth in an advisory role through October 30.
Genworth named Senior VP Kelly Groh as its new CFO, effective immediately.
"Kelly's broad financial background positions her well to provide the necessary continuity to ensure we maintain our current momentum and focus going forward," Genworth President and CEO Tom McInerney said in a statement.
"While this was a personal decision by Mr. Klein for another opportunity, we expect it to raise some investor concerns given Genworth's depressed stock price," Keefe, Bruyette & Woods analyst Ryan Krueger said in a note to investors, according to Bloomberg.
TheStreet Ratings team rates GENWORTH FINANCIAL INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
We rate GENWORTH FINANCIAL INC (GNW) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 significantly decreased by 209.7% when compared to the same quarter one year ago, falling from $176.00 million to -$193.00 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Insurance industry and the overall market, GENWORTH FINANCIAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for GENWORTH FINANCIAL INC is rather low; currently it is at 16.13%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.94% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$113.00 million or 121.85% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 56.65%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 29.41% compared to 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.
- You can view the full analysis from the report here: GNW