NEW YORK ( TheStreet) -- OneBeacon Insurance Group (NYSE: OB) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:
  • OB's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • The revenue fell significantly faster than the industry average of 7.0%. Since the same quarter one year prior, revenues fell by 40.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The share price of ONEBEACON INSURANCE GROUP has not done very well: it is down 5.45% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • ONEBEACON INSURANCE GROUP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, ONEBEACON INSURANCE GROUP reported lower earnings of $1.32 versus $3.59 in the prior year. For the next year, the market is expecting a contraction of 56.1% in earnings ($0.58 versus $1.32).

OneBeacon Insurance Group, Ltd., through its subsidiaries, provides specialty insurance products and services in the United States. The company has a P/E ratio of 21.2, below the average insurance industry P/E ratio of 29.4 and above the S&P 500 P/E ratio of 17.7. OneBeacon Insurance Group has a market cap of $335.7 million and is part of the financial sector and insurance industry. Shares are down 6.1% year to date as of the close of trading on Wednesday.

You can view the full OneBeacon Insurance Group Ratings Report or get investment ideas from our investment research center.
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