Navigators Group Stock Downgraded (NAVG)

NEW YORK ( TheStreet) -- Navigators Group (Nasdaq: NAVG) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.0%. Since the same quarter one year prior, revenues slightly increased by 2.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • NAVG's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Insurance industry. The net income has significantly decreased by 41.8% when compared to the same quarter one year ago, falling from $17.34 million to $10.09 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, NAVIGATORS GROUP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
.

The Navigators Group, Inc., together with its subsidiaries, engages in underwriting ocean marine, property and casualty, professional liability, and specialty insurance products and services. The company has a P/E ratio of 26.7, above the average insurance industry P/E ratio of 22.9 and above the S&P 500 P/E ratio of 17.7. Navigators Group has a market cap of $684.3 million and is part of the financial sector and insurance industry. Shares are down 4.2% year to date as of the close of trading on Tuesday.

You can view the full Navigators Group Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet Ratings Staff

null

More from Markets

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Oil Slumps, Gas Spikes Ahead of Holiday Weekend; Assessing the Chipmakers--ICYMI

Oil Slumps, Gas Spikes Ahead of Holiday Weekend; Assessing the Chipmakers--ICYMI

Week Ahead: Wall Street Looks to Jobs Report as North Korea Meeting Less Certain

Week Ahead: Wall Street Looks to Jobs Report as North Korea Meeting Less Certain

Dow and S&P 500 Decline, Energy Shares Fall as U.S. Crude Oil Slides 4%

Dow and S&P 500 Decline, Energy Shares Fall as U.S. Crude Oil Slides 4%