NEW YORK ( TheStreet) -- SEI Investments Company (Nasdaq: SEIC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, increase in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, poor profit margins and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • SEIC has underperformed the S&P 500 Index, declining 9.04% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • The gross profit margin for SEI INVESTMENTS CO is currently lower than what is desirable, coming in at 27.70%. It has decreased from the same quarter the previous year. Despite the weak results of the gross profit margin, the net profit margin of 22.60% has significantly outperformed against the industry average.
  • SEIC, with its decline in revenue, slightly underperformed the industry average of 2.1%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • SEIC's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 6.20, which clearly demonstrates the ability to cover short-term cash needs.

SEI Investments Company provides investment processing, fund processing, and investment management business outsourcing solutions to corporations, financial institutions, financial advisors, and high-net-worth families. The company has a P/E ratio of 15.7, above the average financial services industry P/E ratio of 15.6 and below the S&P 500 P/E ratio of 17.7. SEI Investments has a market cap of $3.6 billion and is part of the financial sector and financial services industry. Shares are down 24.3% year to date as of the close of trading on Friday.

You can view the full SEI Investments Ratings Report or get investment ideas from our investment research center.
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