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 Monday, May 26.
We've downgraded ASM International (ASMI - Get Report) 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 weak operating cash flow.
ASM experienced a steep decline in earnings per share in the most recent quarter compared with the year-ago quarter, and we anticipate that the company's two-year trend of declining EPS should continue in the coming year. Net income decreased to -$30.9 million from $20 million in the same quarter last year, and return on equity also decreased. ASM's gross profit margin of 33.9% is below what it was in the year-ago quarter, and the net profit margin of -26.1% is below the industry average. Net operating cash flow fell 84.3% to $7.9 million compared with the year-ago quarter.We've upgraded BP (BP - Get Report) from hold to buy, driven by its attractive valuation levels, considering its current price compared to earnings, book value and other measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow. Revenue fell 46.1% since the same quarter last year, and net income fell 63.9%, from $7.1 billion to $2.6 billion. EPS also declined compared with the year-ago quarter, and we feel that the company is likely to report an earnings decline in the coming year. BP's gross profit margin is 20.9%, though it has increased from the same quarter last year. The net profit margin of 5.4% trails the industry average.