TSC Ratings' Updates: Whole Foods

The following ratings changes were generated on Monday, Feb. 23.

We've downgraded Kinross Gold(KGC Quote), which engages in mining and processing gold and silver ores, from buy to hold. Strengths include its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Revenue leaped by an impressive 72.1% over the same quarter one year prior, outperforming the industry average of 6% growth, but earnings per share declined. Net income decreased from $173.1 million in the year-ago quarter to -$968.8 million, significantly underperforming the S&P 500 and the metals and mining industry. Return on equity also greatly decreased, a signal of major weakness in the corproationg.

The company's debt-to-equity ratio is very low at 0.2 and is currently below the industry average, implying very successful debt-level management. The gross profit margin of 50.1% is rather high, having increased from the year-ago quarter, while the net profit margin or -200% is in line with the industry average.

We've upgraded MasterCard(MA Quote) from sell to hold. Strengths include its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Revenue rose by 14.2% since the year-ago quarter, outpacing the industry average of 13.5% growth, but EPS declined. Net income decreased by 21.3%, from $304.2 million to $239.4 million, significantly underperforming the IT services industry but outperforming the S&P 500. ROE also greatly decreased, a signal of major weakness. MasterCard's 0.1 debt-to-equity ratio is very low and currently below the industry average, implying very successful management of debt levels. The company also maintains an adequate quick ratio of 1.2, illustrating its ability to avoid short-term cash problems.