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) -- Greenlight Capital Re (Nasdaq: GLRE) 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, reasonable valuation levels, good cash flow from operations, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- GLRE has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
- Net operating cash flow has increased to -$15.90 million or 16.94% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 6.58%.
- GREENLIGHT CAPITAL RE LTD has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GREENLIGHT CAPITAL RE LTD increased its bottom line by earning $0.35 versus $0.14 in the prior year. This year, the market expects an improvement in earnings ($4.40 versus $0.35).
- GLRE, with its very weak revenue results, has greatly underperformed against the industry average of 17.7%. Since the same quarter one year prior, revenues plummeted by 57.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
-- Written by a member of TheStreet Ratings Staff