Ratings Changes: Carter's, Marsh, HCP

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BOSTON (TheStreet) -- TheStreet.com's stock-rating model upgraded auto financer AmeriCredit(ACF Quote) to "hold."

The numbers: Fiscal fourth-quarter revenue fell 26% to $445 million, but the company swung to a net profit of $31 million from a loss of $150 million in the year-earlier period. The operating margin increased from 36% to 44% and the net margin climbed from negative territory to 7%. The company has ample cash reserves. But a debt-to-equity ratio of 4.7 and $147 million of quarterly interest expenses demonstrate excessive leverage.

The stock: AmeriCredit shares have doubled this year, trouncing major U.S. indices. The company has a pattern of erratic profits and doesn't pay dividends. The quarterly profit was a welcome improvement.

The model upgraded oil and gas equipment provider Cameron International(CAM Quote) to "buy."

The numbers: Second-quarter net income fell 9% to $139 million and earnings per share dropped 5% to 62 cents as revenue declined 14% to $1.3 billion. The operating margin passed 16% and the net margin inched up to 11%. Cameron has ample liquidity, as indicated by its quick ratio of 1.1. And a debt-to-equity ratio of 0.5 reflects a conservative capital structure.

The stock: Cameron is up 68% this year, outpacing major U.S. indices. With a price-to-earnings ratio of 14, the stock is trading at a discount to the market. Cameron doesn't pay dividends.

The model upgraded real estate investment trust HCP(HCP Quote), which invests in health care properties, to "buy."

The numbers: Second-quarter revenue rose 6% to $299 million, but net income plummeted 58% to $97 million, or 23 cents a share. The operating margin increased from 49% to 51%, but the net margin declined from 92% to 33%. The company has a higher-than-ideal debt burden, as evident in its debt-to-equity ratio of 1. And the company is poorly capitalized, with just $82 million of cash reserves. Despite the balance sheet woes, HCP has a robust business model and is seizing the opportunity to purchase undervalued real estate.