Monsanto, Martin Marietta: Ratings Changes

BOSTON (TheStreet) -- TheStreet.com's stock-rating model downgraded distributor Applied Industrial Technologies(AIT Quote) to "hold."

The numbers: The company swung to a fiscal fourth-quarter loss of $8 million, or 19 cents a share, from a profit of $24 million, or 57 cents a share, in the year-earlier period. Revenue fell 20% to $425 million. Its gross margin remained steady at 27% and its operating margin decreased from 7% to 5%. A quick ratio of 1.5 demonstrates adequate liquidity. A debt-to-equity ratio of 0.2 indicates modest leverage.

The stock: Applied Industrial Technologies has risen 4% this year, lagging behind major U.S. indices. The stock trades at a price-to-earnings ratio of 20, indicating parity with the market, but a premium to trading and distributing peers.

The model upgraded Martin Marietta Materials(MLM Quote), a seller of construction aggregates, to "buy."

The numbers: Second-quarter net income decreased 39% to $39 million, or 85 cents a share, as revenue fell 22% to $466 million. Its gross margin rose from 30% to 34%, but its operating margin remained steady at 16%. A quick ratio of 1 reflects adequate liquidity. A debt-to-equity ratio of 1 indicates higher-than-ideal leverage.

The stock: Martin Marietta Materials has fallen 5% this year, trailing major U.S. indices. The stock trades at a price-to-earnings ratio of 32, a premium to the market and construction material peers. The shares offer a 1.7% dividend yield.

The model upgraded Illumina(ILMN Quote), a seller of genetic analysis tools, to "buy."

The numbers: Second-quarter net income increased 95% to $25 million and earnings per share climbed 80% to 18 cents. Revenue grew 15% to $161 million. Its gross margin rose from 67% to 74% and its operating margin ascended from 20% to 22%. The company has an ideal financial position, with $735 million of cash, compared to $280 million of debt.