American Tower, SAIC: Ratings Changes

BOSTON (TheStreet) -- TheStreet.com's stock-rating model upgraded American Tower(AMT Quote), which owns and leases telecom towers, to "buy."

The numbers: Second-quarter net income decreased 65% to $56 million, but earnings per share climbed 8% to 13 cents. Revenue grew 8% to $423 million. Its gross margin was unchanged at 75% and its operating margin rose from 31% to 39%. The company has adequate liquidity, evident in its quick ratio of 1.3. A debt-to-equity ratio of 1.4 reflects higher-than-ideal leverage.

The stock: American Tower has advanced 28% this year, beating the Dow Jones Industrial Average and S&P 500 Index. The stock trades at a price-to-earnings ratio of 61, a premium to the market and wireless-telecom peers. The company doesn't pay dividends.

The model upgraded chipmaker Intel(INTC Quote) to "buy."

The numbers: Third-quarter net income declined 8% to $1.9 billion and earnings per share fell 6% to 33 cents. Revenue dropped 8% to $9.4 billion. Its gross margin rose from 70% to 71%, but its operating margin fell from 31% to 28%. The company has an ideal financial position, with $13 billion of cash, compared with $2.2 billion of debt.

The stock: Intel has risen 43% this year, outpacing major U.S. indices. The stock trades at a price-to-earnings ratio of 48, a premium to the market, but a discount to semiconductor peers. Shares pay a 2.7% dividend yield.

The model upgraded International Rectifier(IRF Quote), a manufacturer of power-management semiconductors, to "hold."

The numbers: The company swung to a fiscal fourth-quarter profit of $29 million, or 41 cents a share, from a loss of $50 million, or 69 cents a share, in the year-earlier period. Revenue fell 22% to $160 million. Its gross margin fell from 32% to 22% and its operating margin remained in negative territory. The company has an ideal financial position, with $483 million of cash and no debt.

The stock: International Rectifier is up 53% this year, beating major U.S. indices. The company posted losses in the previous five quarters. The stock doesn't pay dividends.

The model upgraded government-technology consultant SAIC(SAI Quote) to "buy."

The numbers: Fiscal second-quarter net income jumped 13% to $123 million and earnings per share climbed 15% to 31 cents. Revenue grew 8% to $2.7 billion. Its gross margin was unchanged at 15% and its operating margin rose from 7% to 8%. A quick ratio of 1.8 reflects ample liquidity. A debt-to-equity ratio of 0.5 indicates conservative leverage.

The stock: SAIC is down 6% this year, lagging behind major U.S. indices. The stock trades at a price-to-earnings ratio of 15, a discount to the market and IT-consulting peers.

The model upgraded pharmaceutical maker ViroPharma(VPHM Quote) to "hold."

The numbers: Second-quarter net income decreased 30% to $16 million and earnings per share fell 31% to 20 cents, hurt by a higher share count. Revenue grew 25% to $82 million. Its gross margin dropped from 97% to 92% and its operating margin fell from 45% to 38%. The company has an admirable financial position, with $267 million of cash, compared to $135 million of debt.

The stock: ViroPharma is down 26% this year, lagging behind major U.S. indices. The company posted losses in the two previous quarters. It doesn't pay dividends.

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