TSC Ratings' Updates: Archer Daniels

Revenue rose by 18.1% since the same quarter a year ago, outpacing the industry average of 3.7% growth and boosting EPS. AmSurg's current debt-to-equity ratio, 0.42, is low and is below the industry average, implying successful management of debt levels. The company also maintains a quick ratio of 2.64, which clearly demonstrates the ability to cover short-term cash needs. Net operating cash flow has slightly increased to $23.36 million, or 1.16% when compared with the same quarter last year. AmSurg's 38.3% gross profit margin is strong, though it has decreased from the same period last year. The company's net profit margin of 8.2% compares favorably with the industry average.

Shares are down 19.3% on the year, in part reflecting the market's overall decline. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time

We've downgraded technology provider Elron Electronic Industries(ELRN Quote) from hold to sell, driven by its feeble growth in its earnings per share, disappointing return on equity and generally disappointing historical performance in the stock itself.

EPS declined by 14.5% in the most recent quarter compared with the same quarter last year. During the past fiscal year, Elron swung to a loss, reporting -$1.27 vs. 9 cents in the prior year. Return on equity has greatly decreased, a signal of major weakness. On the basis of ROE, Elron underperforms both the S&P 500 and the diversified financial services industry. Net income is down 17.3% since the same quarter a year ago. Elron's gross profit margin of 57.4% is rather high, though it has decreased significantly from the same period last year. Its net profit margin, however, significantly underperformed the industry average.