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) -- Infinity Property and Casualty Corporation (Nasdaq: IPCC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.
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- The revenue growth came in higher than the industry average of 7.9%. Since the same quarter one year prior, revenues rose by 11.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the Insurance industry average, but is less than that of the S&P 500. The net income increased by 6.5% when compared to the same quarter one year prior, going from $6.95 million to $7.41 million.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Looking ahead, our view is that this company's fundamentals will 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 company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Insurance industry and the overall market, INFINITY PROPERTY & CAS CORP's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for INFINITY PROPERTY & CAS CORP is currently extremely low, coming in at 4.13%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.17% trails that of the industry average.