Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model NEW YORK ( TheStreet) -- Fortegra Financial (NYSE: FRF) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been poor profit margins.
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- The gross profit margin for FORTEGRA FINANCIAL CORP is rather low; currently it is at 16.90%. Regardless of FRF's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.80% trails the industry average.
- FRF's debt-to-equity ratio of 0.81 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further.
- 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 on the basis of return on equity, FORTEGRA FINANCIAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Net operating cash flow has significantly increased by 597.05% to $17.58 million when compared to the same quarter last year. In addition, FORTEGRA FINANCIAL CORP has also vastly surpassed the industry average cash flow growth rate of -25.01%.
-- Written by a member of TheStreet Ratings Staff