Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Montpelier RE Holdings (NYSE: MRH) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins and feeble growth in the company's earnings per share.
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- Compared to its price level of one year ago, MRH is up 23.94% to its most recent closing price of 25.78. Looking ahead, our view is that this company's fundamentals should not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization.
- MONTPELIER RE HOLDINGS 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, MONTPELIER RE HOLDINGS turned its bottom line around by earning $3.57 versus -$2.01 in the prior year. For the next year, the market is expecting a contraction of 4.8% in earnings ($3.40 versus $3.57).
- The gross profit margin for MONTPELIER RE HOLDINGS is rather low; currently it is at 15.57%. It has decreased significantly from the same period last year.