TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.
The following ratings changes were generated on Tuesday, April 7.
We've upgraded Affiliated Computer Services (ACS) from hold to buy, driven by its revenue growth, notable return on equity, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and relatively strong performance when compared with the S&P 500 during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Revenue increased 6.7% since the year-ago quarter. Return on equity improved, which could signal strength in the organization. EPS from the most-recent quarter were slightly below the year-earlier quarter, but we feel the company is poised for EPS growth in the coming year. ACS has a debt-to-equity ratio of 1, which is higher than the industry average. Its 1.8 quick ratio implies strong liquidity.We've downgraded Central European Media Enterprises (CETV - Get Report) from hold to sell, driven by its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally weak debt management. EPS declined in the most recent quarter compared with the year-ago quarter, continuing a two-year trend of declining EPS. Net income fell from $73 million in the year-ago quarter to -$323.3 million in the most recent quarter. ROE also decreased, implying weakness. Net operating cash flow fell to -$38.4 million. Shares have tumbled 84.8% over the past year, underperforming the S&P 500. The fact that the stock has come down in price over the past year 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