Macy's, AngloGold Ashanti: Ratings Changes

BOSTON (TheStreet) -- As fourth-quarter earnings reports stream in, TheStreet's quantitative equity model is warming to stocks with improving fundamentals. Here are three critical upgrades.

3. The model upgraded IMS Health(RX), a consultant and data-provider to health-care companies, to "buy."

The numbers: Fourth-quarter profit decreased 27% to $72 million, or 39 cents a share, as revenue ascended 3.1% to $599 million. The operating margin declined from 23% to 22%. IMS Health holds $385 million of cash and $1.2 billion of debt.

The stock: IMS Health advanced 63% in the past year, outpacing major U.S. indices. The stock trades at a price-to-projected-earnings ratio of 13, a discount to health-care-technology peers. The shares are also cheap when considering sales and cash flow.

2. The model upgraded department-store-owner Macy's(M) to "hold."

The numbers: Macy's swung to a fourth-quarter profit of $466 million, or $1.10 a share, from an impairment-related loss of $4.8 billion, or $11.33, a year earlier. Revenue declined 1% to $7.8 billion. The operating margin extended from 10% to 13%. Macy's holds $1.7 billion of cash and $8.7 billion of debt.

The stock: Macy's soared 135% over the past year, beating U.S. benchmarks. The stock trades at a price-to-projected-earnings ratio of 10, a discount to retail peers. Its PEG ratio, a measure of value relative to growth, of 0.3 represents an 85% discount to the industry average.