NEW YORK ( TheStreet) -- Crawford & Company (NYSE: CRD.A) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and generally poor debt management. Highlights from the ratings report include:
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Insurance industry and the overall market, CRAWFORD & CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- 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 69.7% when compared to the same quarter one year ago, falling from $14.81 million to $4.49 million.
- The gross profit margin for CRAWFORD & CO is rather low; currently it is at 24.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.60% trails that of the industry average.
-- Written by a member of TheStreet Ratings Staff