NEW YORK ( TheStreet) -- Navigators Group (Nasdaq: NAVG) has been upgraded by TheStreet Ratings from hold to buy. 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, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income. 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.
- Net operating cash flow has significantly increased by 679.92% to $32.02 million when compared to the same quarter last year. In addition, NAVIGATORS GROUP INC has also vastly surpassed the industry average cash flow growth rate of 10.56%.
- NAVIGATORS GROUP INC's earnings per share declined by 34.6% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, NAVIGATORS GROUP INC reported lower earnings of $1.72 versus $4.23 in the prior year. This year, the market expects an improvement in earnings ($2.63 versus $1.72).
-- Written by a member of TheStreet RatingsStaff