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) -- XL Group (NYSE: XL) 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, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.
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- Powered by its strong earnings growth of 116.66% and other important driving factors, this stock has surged by 31.13% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, XL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- XL GROUP PLC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, XL GROUP PLC turned its bottom line around by earning $2.10 versus -$1.52 in the prior year. This year, the market expects an improvement in earnings ($2.35 versus $2.10).
- 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 115.8% when compared to the same quarter one year prior, rising from -$515.54 million to $81.45 million.
- XL's revenue growth trails the industry average of 21.6%. Since the same quarter one year prior, revenues slightly increased by 9.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- XL'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.
-- Written by a member of TheStreet Ratings Staff