NEW YORK ( TheStreet) -- Platinum Underwriters Holdings (NYSE: PTP) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
- ACTIVE STOCK TRADERS: Check out TheStreet's special offer for Real Money, headlined by Jim Cramer, now!
- 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. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past 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 431.0% when compared to the same quarter one year prior, rising from -$20.40 million to $67.53 million.
- PTP's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- 40.00% is the gross profit margin for PLATINUM UNDERWRITERS HLDG which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 34.60% significantly outperformed against the industry average.
-- Written by a member of TheStreet Ratings Staff