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The numbers: Fiscal third-quarter revenue declined 2% to $482 million, but profit doubled to $31 million, or 44 cents a share. Its gross margin rose from 33% to 36% and its operating margin climbed from 7% to 11%. Over $25 million of cash and a quick ratio of 1.2 demonstrate adequate liquidity. A debt-to-equity ratio of 0.7 indicates reasonable leverage.
The stock: Central Garden & Pet is up 83% this year, outpacing major U.S. indices. The stock trades at a price-to-earnings ratio of 17, indicating a discount to the market, but parity with household products peers. The company doesn't pay dividends.The model upgraded FMC Technologies (FTI - Get Report), a provider of oil and gas technology services, to "buy." The numbers: Second-quarter net income remained steady at $106 million, but earnings per share climbed 12% to 84 cents, boosted by a lower share count. Revenue fell 6% to $1.1 billion. Its gross margin rose from 22% to 24% and its operating margin increased from 12% to 13%. A quick ratio of 0.7 indicates less-than-ideal liquidity. A debt-to-equity ratio of 0.4 is below the industry average, indicating restrained leverage. The stock: FMC Technologies has surged 117% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 18, a discount to the market, but a premium to oil and gas equipment peers. The company doesn't pay dividends. The model downgraded trucker Heartland Express (HTLD - Get Report) to "hold."