Post-Market Laggard: Genworth Financial (GNW)

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.

Trade-Ideas LLC identified Genworth Financial ( GNW) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Genworth Financial as such a stock due to the following factors:

  • GNW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $65.8 million.
  • GNW is down 5.9% today from today's close.

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More details on GNW:

Genworth Financial, Inc., a financial services company, provides insurance, investment, and financial solutions in the United States and internationally. It operates through U.S. Life Insurance, International Mortgage Insurance, U.S. Currently there are 3 analysts that rate Genworth Financial a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Genworth Financial has been 10.7 million shares per day over the past 30 days. Genworth Financial has a market cap of $3.9 billion and is part of the financial sector and insurance industry. The stock has a beta of 2.41 and a short float of 2.4% with 1.36 days to cover. Shares are down 50.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Genworth Financial as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations 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 a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • GNW's revenue growth trails the industry average of 21.6%. Since the same quarter one year prior, revenues slightly increased by 3.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $562.00 million or 19.32% when compared to the same quarter last year. Despite an increase in cash flow, GENWORTH FINANCIAL INC's cash flow growth rate is still lower than the industry average growth rate of 33.95%.
  • Despite currently having a low debt-to-equity ratio of 0.45, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
  • 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 Insurance industry. The net income has significantly decreased by 881.5% when compared to the same quarter one year ago, falling from $108.00 million to -$844.00 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Insurance industry and the overall market, GENWORTH FINANCIAL INC's return on equity significantly trails that of both the industry average and the S&P 500.

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