TSC Ratings' Updates: Kraft

The gross profit margin for Ceradyne is 45.90%, which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.90% significantly outperformed against the industry average.

Net operating cash flow has significantly increased by 215.73% to $23.34 million when compared with the same quarter last year. In addition, Ceradyne has also vastly surpassed the industry average cash flow growth rate of -36.56%.

Ceradyne, with its decline in revenue, slightly underperformed the industry average of 3.6%. Since the same quarter one year prior, revenues slightly dropped by 0.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

Ceradyne's EPS declined by 9.4% in the most-recent quarter compared year over year. This company has reported somewhat volatile earnings recently, and we feel that it is likely to report a decline in earnings in the coming year. During the past fiscal year, Ceradyne increased its bottom line by earning $5.20 vs. $4.69 in the prior year. For the next year, the market is expecting a contraction of 7.7% in earnings ($4.80 vs. $5.20).

Ceradyne had been a hold since March 7, 2008.

We also upgraded Kraft Foods(KFT Quote) to buy from hold. The consumer goods company is based out of Northfield, Ill., and specializes in the manufacturing of packaged foods and beverages internationally. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses and should give investors a better performance opportunity than most stocks we cover.