Burger King, Credicorp: Ratings Changes
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 total return performance.
The numbers: Second-quarter earnings increased 56% to $115 million, or $1.44 a share, as revenue climbed 26% to $546 million. Its gross margin rose from 67% to 70% and its operating margin increased from 42% to 49%. The company holds $3.5 billion of reserves, compared to $2.9 billion of debt. Its cash balance has grown 11% since last year's second-quarter.
The stock: Credicorp is up 42% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 17, a discount to banking peers and the market. The shares offer a 2.1% dividend yield.The model upgraded fast-food chain Burger King (BKC) to "buy." The numbers: Fiscal fourth-quarter revenue declined 2% to $630 million, but profit jumped 16% to $59 million, or 43 cents a share. Its gross margin dropped from 38% to 33% and its operating margin fell from 14% to 13%. Burger King has less-than-ideal liquidity, demonstrated by its quick ratio of 0.6. A debt-to-equity ratio of 0.9 indicates reasonable leverage. The stock: Burger King has fallen 27% this year, lagging behind major U.S. indices. The stock trades at a price-to-earnings ratio of 12, a discount to other restaurants and the market. The shares offer a dividend yield of 1.4%. The model upgraded Buckeye Technologies (BKI), a maker of wood and cotton-based specialty products, to "hold." The numbers: Fiscal fourth-quarter revenue dropped 18% to $177 million, but profit surged 400% to $46 million, or $1.20 a share, due to alternative fuel mixture credits. Its gross margin rose from 21% to 22%, but its operating margin fell from 9% to 8%. Buckeye has impressive liquidity, reflected by its quick ratio of 2. But a debt-to-equity ratio of 1 indicates higher-than-ideal leverage.
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