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"We rate GLOBAL INDEMNITY PLC (GBLI) 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 compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Insurance industry average. The net income increased by 40.5% when compared to the same quarter one year prior, rising from $6.95 million to $9.76 million.
- GBLI's revenue growth trails the industry average of 26.3%. Since the same quarter one year prior, revenues slightly increased by 1.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, GLOBAL INDEMNITY PLC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- GLOBAL INDEMNITY PLC has improved earnings per share by 39.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, GLOBAL INDEMNITY PLC increased its bottom line by earning $2.45 versus $1.29 in the prior year. For the next year, the market is expecting a contraction of 46.9% in earnings ($1.30 versus $2.45).
- The gross profit margin for GLOBAL INDEMNITY PLC is currently extremely low, coming in at 10.87%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 12.87% is above that of the industry average.
- You can view the full analysis from the report here: GBLI Ratings Report