NEW YORK ( TheStreet) -- Presidential Life Corp (Nasdaq: PLFE) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and poor profit margins. Highlights from the ratings report include:
- PRESIDENTIAL LIFE CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, PRESIDENTIAL LIFE CORP increased its bottom line by earning $0.73 versus $0.07 in the prior year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 73.5% when compared to the same quarter one year prior, rising from $1.67 million to $2.90 million.
- PLFE, with its decline in revenue, underperformed when compared the industry average of 7.0%. Since the same quarter one year prior, revenues fell by 30.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- PLFE has underperformed the S&P 500 Index, declining 7.82% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- Net operating cash flow has significantly decreased to $0.89 million or 87.10% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.