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NEW YORK (TheStreet) -- Tiptree Financial (TIPT) has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate TIPTREE FINANCIAL INC (TIPT) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, weak operating cash flow and generally disappointing historical performance in the stock itself."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TIPTREE FINANCIAL INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, TIPTREE FINANCIAL INC swung to a loss, reporting -$0.81 versus $0.57 in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Diversified Financial Services industry. The net income has significantly decreased by 85.1% when compared to the same quarter one year ago, falling from $1.83 million to $0.27 million.
- The debt-to-equity ratio is very high at 7.33 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- Net operating cash flow has significantly decreased to -$34.85 million or 186.90% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of TIPTREE FINANCIAL INC has not done very well: it is down 7.63% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- You can view the full analysis from the report here: TIPT Ratings Report