Medtronic, Princeton Review: Ratings Changes

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BOSTON (TheStreet) -- TheStreet.com's stock-rating model upgraded entertainment company CKX(CKXE) to "hold".

The numbers: Second-quarter net income plummeted 64% to $4.5 million and earnings per share dropped 58% to 5 cents, cushioned by a lower share count. Revenue decreased 10% to $80 million. Its gross margin declined from 62% to 59% and its operating margin fell from 30% to 16%. CKX has a strong balance sheet, reflected by a quick ratio of 2 and a debt-to-equity ratio of 0.4.

The stock: CKX has advanced 82% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 62, a premium to the market and entertainment peers. The company doesn't pay dividends.

The model upgraded medical device maker Medtronic(MDT) to "buy."

The numbers: Fiscal first-quarter revenue grew 6% to $3.9 billion, but net income decreased 40% to $445 million, or 40 cents a share. Its gross margin deteriorated from 82% to 80% and its operating margin declined from 33% to 31%. Medtronic has ample liquidity, evident in a quick ratio of 1.5. A debt-to-equity ratio of 0.5 demonstrates conservative leverage.

The stock: Medtronic is up 21% this year, outpacing the Dow Jones Industrial Average and S&P 500 Index. The stock trades at a price-to-earnings ratio of 20, a premium to the market, but a discount to medical equipment peers. The stock offers a 2.2% dividend yield.

The model upgraded poultry processor Sanderson Farms(SAFM) to "buy."

The numbers: In the fiscal third quarter, the company swung to a profit of $43 million, or $2.09, from a year-earlier loss of $3.7 million, or 18 cents. Revenue grew 8% to $505 million. Its gross margin rose from 5% to 20% and its operating margin climbed from negative territory to 14%. Sanderson has an adequate liquidity position, demonstrated by $34 million of cash and a quick ratio of 1. A debt-to-equity ratio of 0.3 indicates modest leverage.