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Ratings Changes: EMC, Dr. Reddy's, Nidec

TheStreet.com 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 outperformance on a total return basis.

TheStreet.com's stock-rating model upgraded EMC (EMC - Get Report) to "buy." The company develops and sells data-storage products.

The numbers: First-quarter revenue decreased 9.2% from a year earlier to $3.1 billion as net income declined 23% to $194 million and earnings per share fell 17% to 10 cents. Operating margin dropped from 12% to 9% and net margin decreased from 7% to 6%. The Hopkinton, Mass.-based company boosted its cash balance 29% to $7.2 billion as it cut debt obligations 13% to $3 billion. A quick ratio of 1.8 and a debt-to-equity ratio of 0.2 indicate a strong balance sheet.

The stock: EMC has rallied 29% this year, outperforming major U.S. indices. The stock is expensive, trading at a price-to-earnings ratio of 21. Like many of its tech peers, EMC doesn't pay dividends.

The model upgraded Japan-based Nidec (NJ - Get Report) to "buy." The company makes motors and components for appliances, computers and industrial equipment.

The numbers: Fiscal fourth-quarter revenue plummeted 72% to $667 million. Net income and earnings per share dropped 67% to $35 million and 6 cents, respectively, as net margin inched up to 5%. The company has doubled its cash reserves to $2 billion, pushing its quick ratio past 1, a measure of adequate liquidity. However, the company also doubled its debt to $2.3 billion.

The stock: Nidec has surged 68% this year on signs of economic improvement and a tech spending rebound. The stock trades at an expensive price-to-earnings ratio of 30 and offers a dividend yield less than 1%.
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SYM TRADE IT LAST %CHG
EMC $26.37 -0.08%
NS $59.99 1.10%
NSH $37.99 -0.18%
NJ $19.14 2.50%
RDY $55.56 0.43%

Markets

DOW 17,725.94 +106.43 0.60%
S&P 500 2,072.02 +8.91 0.43%
NASDAQ 5,001.6190 +14.7520 0.30%

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