TSC Ratings' Updates: Tiffany

Shares are down 76.02%, underperforming the S&P 500. This is not necessarily negative and could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

We've upgraded PDL Biopharma (PDLI Quote) from sell to hold. Strengths include its revenue growth, notable return on equity and impressive record of earnings per share growth. Weaknesses include a generally disappointing performance in the stock itself and generally poor debt management.

Revenue growth of 26.3% since the same quarter a year ago outpaced the industry average of 17.2% and appears to have helped boost EPS. The company reported significant earnings per share improvement in the most recent quarter and has demonstrated a pattern of positive EPS growth over the past two years, a trend we feel should continue, suggesting improving business performance. During the past fiscal year, PDL Biopharma earned -17 cents, vs. -$1.13 in the prior year. This year, the market expects an improvement in earnings to 80 cents.

PDL's gross profit margin of 23.4% is rather low, but it has increased significantly over the same period last year. Net profit margin of 72% significantly outperformed the industry average. The debt-to-equity ratio is very high at 7.55 and currently higher than the industry average, implying very poor management of debt levels within the company, but the company has managed to keep a very strong quick ratio of 8.11, which shows the ability to cover short-term cash needs.