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The numbers: Fiscal fourth-quarter net income decreased 19% to $80 million and earnings per share dropped 35% to 53 cents, hurt by a higher share count. Revenue declined 12% to $537 million. Its gross margin increased from 68% to 69% and its operating margin grew from 23% to 24%. A quick ratio of 0.9 indicates less-than-ideal liquidity. But a debt-to-equity ratio of 0.6 is less than the industry average, demonstrating restrained leverage.
The stock: Brown-Forman has fallen 4% this year, underperforming major U.S. indices. The stock trades at a price-to-earnings ratio of 17, a discount to the market and other distillers. The shares offer a dividend yield of 2.4%.The model upgraded OneBeacon Insurance Group (OB) to "hold." The numbers: Second-quarter profit surged 439% to $128 million, or $1.35 a share, as revenue increased 28% to $653 million. Its gross margin rose from 13% to 30% and its operating margin climbed from 12% to 29%. The company has a strong financial position, with $603 million of cash and $641 million of debt. A debt-to-equity ratio of 0.5 indicates conservative leverage. The stock: OneBeacon is up 29% this year, outpacing major U.S. indices. The stock offers a 6.2% dividend yield, higher than the average of companies in the S&P 500 Index. The model upgraded chemical maker Olin (OLN) to "buy." The numbers: Second-quarter net income declined 22% to $28 million, or 36 cents a share. Revenue decreased 11% to $383 million. Its gross margin remained steady at 23%, but its operating margin decreased from 10% to 9%. Olin has a strong financial position, evident in its quick ratio of 1.9 and debt-to-equity ratio of 0.3.
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