Declines From Validus Holdings Inc. (VR) Drive Down Financial Sector

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.

Validus Holdings ( VR) pushed the Financial sector lower today making it today's featured Financial laggard. The sector as a whole closed the day up 1.1%. By the end of trading, Validus Holdings fell 48 cents (-1.3%) to $37.23 on heavy volume. Throughout the day, 1.6 million shares of Validus Holdings exchanged hands as compared to its average daily volume of 851,400 shares. The stock ranged in price between $36.99-$37.91 after having opened the day at $37.81 as compared to the previous trading day's close of $37.71. Other companies within the Financial sector that declined today were: Carrollton Bancorp ( CRRB), down 9.3%, Consumer Portfolio Services ( CPSS), down 7.8%, Credit Suisse ( DWTI), down 6.8%, and NTS Realty Holdings ( NLP), down 6.3%.
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Validus Holdings, Ltd. through its subsidiaries, provides reinsurance, insurance, and insurance linked securities fund management services in the property, marine, and specialty lines markets worldwide. Validus Holdings has a market cap of $4.14 billion and is part of the insurance industry. The company has a P/E ratio of 9.5, below the S&P 500 P/E ratio of 17.7. Shares are up 9.1% year to date as of the close of trading on Tuesday. Currently there are six analysts that rate Validus Holdings a buy, no analysts rate it a sell, and one rates it a hold.

TheStreet Ratings rates Validus Holdings as a 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, reasonable valuation levels, good cash flow from operations, notable return on equity and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

On the positive front, Altis Resident ( RESI), up 32.2%, Institutional Financial Markets ( IFMI), up 24.1%, National Bank of Greece ( NBG), up 18.7%, and Doral Financial ( DRL), up 17.3%, were all gainers within the financial sector with State Street ( STT) being today's featured financial sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the financial sector could consider Financial Select Sector SPDR ( XLF) while those bearish on the financial sector could consider Proshares Short Financials ( SEF).

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