NEW YORK ( TheStreet) -- Meadowbrook Insurance Group (NYSE: MIG) 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 feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
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- MIG's revenue growth has slightly outpaced the industry average of 13.1%. Since the same quarter one year prior, revenues rose by 15.1%. 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.
- MIG'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.
- 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, MEADOWBROOK INS GROUP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for MEADOWBROOK INS GROUP INC is currently extremely low, coming in at 0.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.30% is significantly below that of the industry average.
-- Written by a member of TheStreet Ratings Staff