TSC Ratings' Updates: Nvidia

The following ratings changes were generated on Wednesday, Feb. 11.

We've downgraded Hercules Offshore(HERO Quote), which provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry, from hold to sell. This rating was driven by the company's its deteriorating net income, disappointing return on equity, poor profit margins, generally weak debt management and generally disappointing historical performance in the stock itself.

Net income decreased from $31.3 million in the year-ago quarter to -$1.1 billion, significantly underperforming both the S&P 500 and the energy equipment and services industry. Return on equity also greatly decreased, a signal of major weakness within the corporation. Hercules Offshore's gross profit margin of 32% is lower than desirable, though it has increased from the same period last year. Its net profit margin of -358.8% significantly underperformed the industry average, and its debt-to-equity ratio of 1.2 is relatively high, suggesting a need for better debt-level management. The company's quick ratio is somewhat strong at 1.5, demonstrating its ability to handle short-term liquidity needs.

Shares tumbled 84.4% over the last year, underperforming the S&P 500, and EPS fell 3,554.1% compared with the year-ago quarter. Naturally, the overall market trend is bound to be a significant factor, and in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.