TSC Ratings' Updates: Google

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 Friday, May 1.

We've downgraded BioMarin Pharmaceutical(BMRN Quote) from hold to sell, driven by its generally disappointing historical performance in the stock itself, unimpressive growth in net income, generally weak debt management and feeble growth in its earnings per share.

Net income fell from $1.7 million in the year-ago quarter to -$13.2 million in the most recent quarter. BioMarin has a debt-to-equity ratio of 1.8, which is high compared with the industry average. It maintains a strong quick ratio of 4.9. EPS declined in the most recent quarter compared with the same quarter last year, and we feel the company is likely to report a decline in earnings in the coming year. Return on equity rose from the year-ago quarter.

Shares have tumbled 64.7% over the past year, underperforming the S&P 500. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

We've downgraded Cabot(CBT Quote) from hold to sell, driven by its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

EPS are down in the most recent quarter compared with the year-ago quarter, and we anticipate that the company's yearlong pattern of declining EPS should continue in the coming year. Net income fell from $11 million in the year-ago quarter to -$56 million in the most recent quarter. ROE also fell, implying weakness within the company. Cabot's 8.7% gross profit margin has decreased from the year-ago period, and its net profit margin of -11.9% is below the industry average.