GameStop, Moody's: Ratings Changes

The stock: GameStop has advanced 18% this year, beating the Dow Jones Industrial Average, but trailing the S&P 500 Index. The stock trades at a price-to-earnings ratio of 11, a discount to the market and computer and electronics retailers. GameStop doesn't pay dividends.

The model upgraded credit-rating company Moody's(MCO) to "hold."

The numbers: Third-quarter net income decreased 11% to $101 million, or 42 cents a share, as revenue grew 4% to $452 million. The company's gross margin decreased from 72% to 70%, and its operating margin fell from 43% to 39%. Moody's holds $430 million of cash, demonstrating adequate liquidity. The shareholders' deficit decreased 28% to $648 million.

The stock: Moody's has rallied 22% this year, more than the Dow and S&P 500. The stock trades at a price-to-earnings ratio of 15, a discount to the market and peers in specialized finance. The shares pay a 1.6% dividend yield.

The model downgraded PharMerica(PMC), which operates pharmacies for hospitals, to "hold."

The numbers: Third-quarter profit more than tripled to $15 million, or 48 cents a share, as revenue decreased 5% to $461 million. PharMerica's gross margin remained steady at 15%, and its operating margin was unchanged at 4%. A quick ratio of 3.2 demonstrates ample liquidity. A debt-to-equity ratio of 0.7 indicates reasonable leverage.

The stock: PharMerica has fallen 7% this year, underperforming major U.S. indices. The stock trades at a price-to-earnings ratio of 17, a discount to the market, but a premium to its peers.

-- Reported by Jake Lynch in Boston.