Acuity Brands, CenterPoint: Ratings Changes

BOSTON (TheStreet) -- TheStreet.com's stock-rating model upgraded Acuity Brands(AYI Quote), maker of lighting fixtures, to "buy."

The numbers: Fiscal fourth-quarter profit decreased 31% to $29 million, or 68 cents a share. Revenue declined 19% to $423 million. Its gross margin dropped from 42% to 41%, and its operating margin narrowed from 14% to 10%. A quick ratio of 0.5 indicates poor liquidity. A debt-to-equity ratio of 0.3 reflects conservative leverage.

The stock: Acuity Brands has advanced 1% this year, lagging behind major U.S. indices. The stock trades at a price-to-earnings ratio of 17, a discount to the market and electrical component peers. The shares pay a 1.5% dividend yield.

The model upgraded utility CenterPoint Energy(CNP Quote) to "buy."

The numbers: Second-quarter net income decreased 15% to $86 million, or 24 cents a share. Revenue fell 39% to $1.6 billion. Its gross margin rose from 18% to 27%, and its operating margin jumped from 11% to 15%. The company has weak liquidity, evident in its quick ratio of 0.5. A debt-to-equity ratio of 4.5 reflects excessive leverage.

The stock: CenterPoint Energy is up 3% this year, trailing major U.S. indices. The stock trades at a price-to-earnings ratio of 12, a discount to the market and utility peers. The shares pay a 5.8% dividend yield.

The model upgraded adhesives and chemicals maker H.B. Fuller(FUL Quote) to "buy."

The numbers: Third-quarter profit increased 63% to $35 million, or 72 cents a share, as revenue fell 13% to $315 million. Its gross margin rose from 28% to 35%, and its operating margin increased from 7% to 10%. A quick ratio of 1.7 demonstrates adequate liquidity. A debt-to-equity ratio of 0.4 is below the industry average, indicating restrained leverage.

The stock: H.B. Fuller is up 42% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 70 because of its fourth-quarter loss. The shares pay a 1.2% dividend yield.

The model upgraded Laboratory Corp. of America(LH Quote) to "buy."

The numbers: Second-quarter net income rose 31% to $136 million, or $1.24 a share. Revenue grew 4% to $1.2 billion. Its gross margin was unchanged at 45%, but its operating margin rose from 18% to 21%. The company has adequate liquidity, evident in its quick ratio of 1.6. A debt-to-equity ratio of 0.7 indicates reasonable leverage.

The stock: Laboratory Corp. has risen 8% this year, less than major U.S. indices. The stock trades at a price-to-earnings ratio of 15, a discount to the market and health care service peers. The company doesn't pay dividends.

The model upgraded Scientific Games(SGMS Quote), which provides services to the lottery industry, to "hold."

The numbers: Second-quarter net income declined 21% to $20 million, or 22 cents a share. Revenue dropped 26% to $225 million. Its gross margin increased from 40% to 43%, but its operating margin fell from 13% to 12%. A quick ratio of 1.1 reflects adequate liquidity. A debt-to-equity ratio of 2.1 indicates excessive leverage.

The stock: Scientific Games is up 5% this year, lagging behind major U.S. indices. The company posted losses in the two previous quarters. The company doesn't pay dividends.

-- Reported by Jake Lynch in Boston.