TSC Ratings' Updates: America Movil

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 Thursday, May 21.

We've upgraded America Movil(AMX Quote) from hold to buy, driven by its expanding profit margins, attractive valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

America Movil's gross profit margin is 59.4%, having increased from the same quarter last year, but its net profit margin of 17.4% trails the industry average. Revenue fell by 13.7% from the year-ago quarter, and EPS declined by 5.4%. The company has suffered a declining pattern of earnings per share over the past year, but we anticipate this trend reversing over the coming year. The company's current return on equity has slightly decreased from the same quarter one year prior, implying a minor weakness in the organization.

We've upgraded Burlington Northern Santa Fe(BNI Quote) from hold to buy, driven by its attractive valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Revenue 17.4% since the year-ago quarter, and EPS decreased by 33.8%. We feel the company is likely to report a decline in earnings in the coming year. Net income fell by 35.6% compared with the year-ago quarter, from $455 million to $293 million, and ROE decreased slightly.

We've upgraded Cooper Industries(CBE Quote) from hold to buy, driven by its attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.