The numbers: First-quarter revenue increased 12% to $4.4 million as net income rose to $300,000 and earnings per share increased to 1 cent from a net loss in the year-ago quarter. Operating margin increased to 0.6% from -6.2% and its net margin inched past breakeven. The company has a strong financial position, evident in its $7 million cash balance, quick ratio of 1.3 and zero debt.
The stock: SmartPros has gained 72% this year, outperforming major U.S. indices. The stock trades at a low price to earnings ratio of 11 and does not pay dividends.
The model upgraded Targa Resources Partners (NGLS) to "buy." The company gathers, processes and sells natural gas.
The numbers: First-quarter revenue plunged 53% to $239 million as the company swung to a net loss of $2.1 million from a net profit of $25 million in last year's first quarter. Operating margin dropped from 6.6% to 3.1% and net margin dipped into negative territory. But the company has a strong financial position, having nearly tripled its cash reserves to $62 million since the year-ago quarter. A debt-to-equity ratio of 0.9 is acceptable, but not ideal.The stock: Targa is up 86% in 2009, outperforming all major U.S. indices. The stock trades at a fair price-to-earnings ratio of 12 and offers a 14% cash distribution yield. Cash distributions are taxed differently than dividends. The model downgraded W.P. Carey (WPC) to "hold." The company manages investments and real estate funds, and provides long-term lease financing. The numbers: First-quarter revenue increased 8.5% to $62 million as net income climbed 3.5% to $18 million and earnings per share inched up 2.3% to 44 cents. Operating margin increased from 37% to 38%, but net margin dropped from 30% to 29%. The company has a low debt-to-equity ratio of 0.56 and $22 million of cash, indicating an adequate liquidity position.
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