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) -- Platinum Underwriters Holdings (NYSE: PTP) 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 notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, unimpressive growth in net income and feeble growth in the company's earnings per share.
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- PTP's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Insurance industry and the overall market, PLATINUM UNDERWRITERS HLDG's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- 35.05% is the gross profit margin for PLATINUM UNDERWRITERS HLDG which we consider to be strong. Regardless of PTP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PTP's net profit margin of 29.22% significantly outperformed against the industry.
- The change in net income from the same quarter one year ago has exceeded that of the Insurance industry average, but is less than that of the S&P 500. The net income has significantly decreased by 26.2% when compared to the same quarter one year ago, falling from $67.53 million to $49.85 million.
- Net operating cash flow has decreased to -$36.56 million or 37.96% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, PLATINUM UNDERWRITERS HLDG has marginally lower results.