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The numbers: The company swung to a second-quarter profit of $40,000, or breakeven per share, from a loss of $390,000, or 1 cent per share, in the year-earlier period. Revenue grew 49% to $31 million. Its gross margin fell from 79% to 78% and its operating margin remained in shallow negative territory. The company has an ideal financial position, with $107 million of cash and no debt.
The stock: Constant Contact is up 40% this year, more than major U.S. indices. The company posted losses in the four previous quarters. The stock doesn't pay dividends.The model upgraded chemical maker Lubrizol (LZ) to "buy." The numbers: Second-quarter profit increased 69% to $132 million, or $1.92 a share, as revenue fell 18% to $1.1 billion. Its gross margin rose from 25% to 39% and its operating margin jumped from 10% to 20%. The company possesses ample liquidity, evident in its quick ratio of 1.9. A debt-to-equity ratio of 1 reflects higher-than-ideal leverage. The stock: Lubrizol has advanced 88% this year, outpacing major U.S. indices. Shares pay a 1.8% dividend yield. The model upgraded household products seller Newell Rubbermaid (NWL) to "hold." The numbers: Second-quarter net income ascended 14% to $106 million and earnings per share climbed 12% to 37 cents. Revenue fell 18% to $1.5 billion. Its gross margin rose from 37% to 40% and its operating margin increased from 13% to 15%. A quick ratio of 0.8 demonstrates less-than-ideal liquidity. The company has an excessive debt load, evident in its debt-to-equity ratio of 1.7. The stock: Newell Rubbermaid is up 54% this year, beating major U.S. indices. Shares pay a 1.3% dividend yield. The model upgraded Seaboard (SEB), a diversified agribusiness and transportation conglomerate, to "buy." The numbers: Second-quarter profit increased 28% to $27 million, or $21.76 a share, as revenue declined 13% to $870 million. Its gross margin rose from 7% to 9% and its operating margin remained in shallow positive territory. The company has a strong financial position, with $445 million of cash, compared to $198 million of debt. The stock: Seaboard has risen 11% this year, more than the Dow Jones Industrial Average, but less than the S&P 500 Index. The stock trades at a price-to-earnings ratio of 17, a discount to the market, but a premium to conglomerate peers. The model upgraded engineering and construction company Shaw Group (SHAW) to "hold." The numbers: Fiscal third-quarter profit decreased 85% to $7.9 million, or 9 cents a share, as revenue increased 2% to $1.8 billion. Its gross margin was little-changed at 10% and its operating margin declined from 6% to 5%. A quick ratio of 0.9 reflects less-than-ideal liquidity. A debt-to-equity ratio of 1 indicates higher-than-ideal leverage. The stock: Shaw Group is down 10% this year, lagging behind major U.S. indices. The stock trades at a price-to-earnings ratio of 30, a premium to the market and construction and engineering peers. The company doesn't pay dividends. -- Reported by Jake Lynch in Boston.
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