TSC Ratings' Updates: Dell
Shares are down 62.4% on the year, underperforming the S&P 500, and EPS are down 1,897.5%. The stock's decline should not necessarily be interpreted as a negative; it 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 downgraded biopharmaceutical company ViroPharma (VPHM) from hold to sell, driven by its feeble growth in its earnings per share, deteriorating net income, weak operating cash flow, generally disappointing historical performance in the stock itself and disappointing return on equity.
EPS declined 104% compared with the year-ago quarter, and we anticipate that the company's two-year pattern of declining EPS should continue in the coming year. Net income decreased to -$980,000 in the most recent quarter from $20.4 million in the year-ago quarter, significantly underperforming the S&P 500 and the pharmaceuticals industry. Net operating cash flow fell 98.2% to $570,000, and ROE also decreased, a clear sign of weakness.
Shares are down 49.7% on the year, in part reflecting the market's overall decline. 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.We've downgraded W&T Offshore (WTI), which engages in the acquisition, exploitation, exploration, production and development of oil and natural gas properties, from hold to sell. This rating is driven by the company's deteriorating net income, disappointing return on equity, weak operating cash flow, generally weak debt management and generally disappointing historical performance in the stock itself. Net income fell from $49.4 million in the year-ago quarter to -$851.4 million in the most recent quarter, significantly underperforming the S&P 500 and the oil, gas and consumable fuels industry. ROE also greatly decreased, a signal of major weakness. Net operating cash flow fell to -$157.8 million, underperforming the industry average. W&T's 1.1 debt-to-equity ratio is high relative to the industry average, suggesting a need for better debt-level management, but its quick ratio is somewhat strong at 1.5, demonstrating its ability to handle short-term liquidity needs. Shares fell 74.7% over the past year, underperforming the S&P 500, and EPS fell 1,824.6%. The stock's decline should not necessarily be interpreted as a negative; it 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. Other ratings changes included Checkpoint Systems (CKP)and First Financial Northwest (FFNW), both downgraded from hold to sell. All ratings changes generated on Feb. 27 are listed below.
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