Universal American Corp Stock Upgraded (UAM)

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) -- Universal American (NYSE: UAM) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:
  • UAM's debt-to-equity ratio is very low at 0.21 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Net operating cash flow has significantly increased by 64.90% to -$16.86 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 37.75%.
  • UAM, with its decline in revenue, underperformed when compared the industry average of 16.9%. Since the same quarter one year prior, revenues slightly dropped by 9.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Health Care Providers & Services industry and the overall market, UNIVERSAL AMERICAN CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for UNIVERSAL AMERICAN CORP is currently extremely low, coming in at 1.79%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.98% trails that of the industry average.

Universal American Corp., a specialty health and life insurance holding company, provides health insurance and managed care products and services to the growing Medicare and Medicaid population in the United States. Universal American has a market cap of $709.6 million and is part of the health care sector and health services industry. Shares are up 14% year to date as of the close of trading on Friday.

You can view the full Universal American Ratings Report or get investment ideas from our investment research center.

3x UPSIDE POTENTIAL: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

More from Markets

Market of the Week: E-mini S&P 500

Market of the Week: E-mini S&P 500

Bristol-Myers Slides After FDA Delays Marketing Approval for Cancer Therapy

Bristol-Myers Slides After FDA Delays Marketing Approval for Cancer Therapy

Dow Trades Lower After Momentum From China Rally Fades, Nasdaq Rises

Dow Trades Lower After Momentum From China Rally Fades, Nasdaq Rises

Goldman Women Find Bias in Pay as Corporate Old-Boy Clubs Endure

Goldman Women Find Bias in Pay as Corporate Old-Boy Clubs Endure

Can OPEC Still Influence the Price of Crude Oil?

Can OPEC Still Influence the Price of Crude Oil?