NEW YORK (TheStreet) -- Shares of The Phoenix Companies (PNX) closed up 10.02% to $52.81 on very heavy trading volume after the troubled life insurer and annuity provider reportedly hired investment banks Goldman Sachs (GS) and Sandler O'Neill and Partners to explore a sale, sources told Reuters.
Phoenix launched its sale process earlier this month, contacting potential buyers, sources added.
TheStreet Ratings team rates PHOENIX COMPANIES INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate PHOENIX COMPANIES INC (PNX) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- PNX, with its decline in revenue, slightly underperformed the industry average of 7.4%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. 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 Insurance industry and the overall market, PHOENIX COMPANIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$117.10 million or 11810.00% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: PNX Ratings Report