SunPower, Hartford, CNA: Ratings Changes
BOSTON ( TheStreet) -- As fourth-quarter financial data streams and the stock market digests 2010's uncertain economic footing, our stock-rating model is shifting its view on select companies. Here are three pertinent ratings changes.
3. The model downgraded solar-panel maker SunPower (SPWRA) to "sell." Investors are awaiting SunPower's fourth-quarter results.
The numbers: Third-quarter net income tumbled 48% to $13 million, and earnings per share fell 55% to 13 cents, hurt by a higher share count. Revenue increased 24% to $466 million. SunPower's operating margin narrowed from 13% to 7.4%. The company holds $550 million of cash, equating to a quick ratio of 1.5. Its 0.5 debt-to-equity ratio demonstrates conservative leverage.
The stock: SunPower recorded a 52-week low of $18.92 on Friday. The stock fell 46% during the past year, underperforming major U.S. indices and domestic competitor First Solar (FSLR), which dropped 24% over the same period. SunPower shares are cheap relative to those of electrical-equipment peers based on projected earnings, book value and sales. They're expensive when considering cash flow.2. The model upgraded property-and-casualty insurer CNA Financial (CNA) to "hold." The numbers: CNA Financial swung to a fourth-quarter profit of $246 million, or 81 cents a share, from a loss of $336 million, or $1.31, a year earlier. Revenue increased 56% to $2.4 billion. CNA's operating margin hit16%. Its 0.2 debt-to-equity ratio is less than the industry average, indicating restrained leverage. The stock: CNA Financial soared 85% in the past year, outpacing major U.S. indices. The shares are cheap in comparison to those of insurance peers based on projected earnings, book value, sales and cash flow. They're costly when weighing trailing earnings. The stock has a beta, a measure of stock-market correlation, of 2.2, so it tends to magnify market swings.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV