TSC Ratings' Updates: MasterCard

The following ratings changes were generated on Tuesday, Nov. 18.

We've downgraded Frontline(FRO Quote), which engages in the ownership and operation of oil tankers, from buy to hold. Strengths include its robust revenue growth, notable return on equity and expanding profit margins. However, as a counter to these strengths, we find that the company has not been very careful in the management of its balance sheet.

Revenue leaped by 57.8% since the same quarter a year ago, exceeding the industry average of 29.7% growth and boosting earnings per share significantly in the most recent quarter compared with the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year, which we feel should continue, suggesting improving business performance. During the past fiscal year, Frontline increased its bottom line by earning $7.55 vs. $6.72 in the prior year. This year, the market expects an improvement in earnings to $7.82. ...