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.
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- 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.