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TheStreet Open House

Analysts' Actions: Davita, Gilead, G&K Services, Omnivision, More

NEW YORK (TheStreet) -- RATINGS CHANGES

America's Car-Mart (CRMT) was upgraded to buy at TheStreet Ratings.

Davita HCP (DVA) was downgraded at Deutsche Bank to hold from buy. Valuation call, based on a 12-month price target of $77, Deutsche Bank said.

Read More: 8 Stocks George Soros Is Buying in 2014

Gilead (GILD) was initiated with an outperform rating at FBR Capital Markets. Twelve-month price target is $125. Hepatitis C market has net been fully appreciated by the market and can drive growth over the next 15 years, FBR Capital Markets said.

G&K Services (GK) was upgraded at J.P. Morgan to overweight. Company continues to execute well and trades at an attractive valuation, J.P. Morgan said.

Lithia Motors (LAD) was downgraded at Morgan Stanley to underweight, Morgan Stanley said. $80 price target. Valuation call, as the stock has tripled since 2012.

Nordic American Tankers (NAT) was downgraded to sell at TheStreet Ratings.

Omnivision (OVTI) was downgraded at Robert Baird to neutral from outperform at Robert Baird. Do not expect a premium to the acquisition proposal from HCM, Robert Baird said.

Steve Madden (SHOO) was upgraded at Sterne Agee to buy. Twelve-month price target is $40. Dolce Vita purchase should help boost growth, Sterne Agee said.

Read More: Shutterfly Could Be Up for Sale

Editor's note: To see analysts' stock comments and changes to price targets and earnings estimates, go to "Street Notes" which is available only to Real Money subscribers. To find out how to become a subscriber, please click here.

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Now let's look at TheStreet Ratings' take on some of these stocks.

TheStreet Ratings team rates OMNIVISION TECHNOLOGIES INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate OMNIVISION TECHNOLOGIES INC (OVTI) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Powered by its strong earnings growth of 52.94% and other important driving factors, this stock has surged by 37.87% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, OVTI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 68.9% when compared to the same quarter one year prior, rising from $8.92 million to $15.07 million.
  • OVTI's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.03, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 610.83% to $62.40 million when compared to the same quarter last year. In addition, OMNIVISION TECHNOLOGIES INC has also vastly surpassed the industry average cash flow growth rate of -11.39%.

TheStreet Ratings team rates LITHIA MOTORS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate LITHIA MOTORS INC (LAD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 0.3%. Since the same quarter one year prior, revenues rose by 21.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 38.14% and other important driving factors, this stock has surged by 33.75% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LAD should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • LITHIA MOTORS INC has improved earnings per share by 38.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, LITHIA MOTORS INC increased its bottom line by earning $4.02 versus $3.05 in the prior year. This year, the market expects an improvement in earnings ($5.02 versus $4.02).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 49.9% when compared to the same quarter one year prior, rising from $25.56 million to $38.31 million.

This article was written by a staff member of TheStreet.

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