TSC Ratings' Updates: Alberto-Culver

TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.

The following ratings changes were generated on Friday, June 19.

We've upgraded Alberto-Culver(ACV Quote) from hold to buy, driven by its largely solid financial position with reasonable debt levels by most measures, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Alberto-Culver's debt-to-equity ratio of 0 is below the industry average, implying very successful management of debt levels. The 2.6 quick ratio clearly demonstrates an ability to cover short-term cash needs. Earnings per share improved slightly from the year-ago quarter, and we feel that the company's two-year trend of positive EPS growth should continue. Revenue dropped by 1.4% from the year-ago quarter. A 51.8% gross profit margin is rather high, though it has decreased from the same period last year. The 8.2% net profit margin compares favorably with the industry average. Net income fell by 3.3% from the same quarter last year, from $29 million to $28.1 million. ...