TSC Ratings' Updates: Tupperware

We've downgraded Magellan Midstream Holdings(MGG Quote), which engages in the transportation, storage, and distribution of refined petroleum products, from hold to sell, driven by its generally disappointing historical performance in the stock itself and generally weak debt management.

The debt-to-equity ratio is very high at 15.61 and currently higher than the industry average, implying very poor management of debt levels within the company. The company also manages to maintain a quick ratio of 0.40, which clearly demonstrates the inability to cover short-term cash needs. Net income increased by 25% when compared with the same quarter a year ago, from $14.11 million to $17.65 million, underperforming the oil, gas and consumable fuels industry but outperforming the S&P 500. Revenue dropped by 9%, but EPS increased. Magellan's gross profit margin of 41.4% is strong, having increased from the same quarter last year. The net profit margin of 6%, however, trails the industry average.

Shares are down by 52.23%, underperforming the S&P 500, but don't assume that it can now be tagged as cheap and attractive. Based on its current price in relation to its earnings, MGG is still more expensive than most of the other companies in its industry.

We've downgraded TJX(TJX Quote), which operates as an off-price retailer of apparel and home fashions, from buy to hold. Strengths include its revenue growth, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.