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) -- Universal American (NYSE: UAM) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- UAM's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- UNIVERSAL AMERICAN CORP's earnings per share declined by 5.9% 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 two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, UNIVERSAL AMERICAN CORP reported lower earnings of $0.00 versus $1.13 in the prior year. This year, the market expects an increase in earnings to $0.65 from $0.00.
- UAM, with its decline in revenue, underperformed when compared the industry average of 16.8%. Since the same quarter one year prior, revenues slightly dropped by 5.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and the Health Care Providers & Services industry average. The net income has decreased by 1.9% when compared to the same quarter one year ago, dropping from $14.11 million to $13.85 million.
-- Written by a member of TheStreet Ratings Staff