Royal Caribbean, Sony Hit Highs
BOSTON (
) -- U.S. indices gained on Tuesday on strong earnings reports and a weaker dollar. These stocks outpaced benchmarks and hit 52-week highs.
3. Royal Caribbean Cruises
(RCL) - Get Report
jumped 3.8% to $27.60. Shares of the cruise company, which reported quarterly results on Thursday, have rallied 9.2% during the past month.
The numbers
: Fourth-quarter net income doubled to $3.4 million, or 2 cents a share. Revenue declined marginally to $1.5 billion. Royal Caribbean's operating margin expanded from 4.4% to 5.7%. The company has weak liquidity, with a quick ratio of 0.2. Its 1.1 debt-to-equity ratio is higher than the industry average, indicating excessive leverage.
The stock
: We rate Royal Caribbean "hold." Its stock has quadrupled during the past year, outpacing major U.S. indices. The shares are cheaper than those of hotel and leisure peers based on projected earnings, book value, sales and cash flow. They are expensive based on trailing earnings. Our quantitative model gives Royal Caribbean a volatility score of 2.8 out of 10.
2. Cardinal Health
(CAH) - Get Report
gained 1.8% to $34.25. Shares of the medical product distributor, which reported quarterly results on Thursday, have appreciated 6.2% during the past month.
The numbers
: Fiscal second-quarter profit increased 36% to $235 million, or 64 cents a share, as revenue rose 3.3% to $25 billion. Cardinal Health's operating margin was unchanged at 1.4%. The company boasts a clean balance sheet, with $1.7 billion of cash and $2.1 billion of debt. Its 0.4 debt-to-equity ratio is less than the industry average, indicating restrained leverage. But liquidity requires improvement.
The stock
: We rate Cardinal Health "hold." Its stock has dropped 6.5% during the past year, underperforming major U.S. indices. The shares are cheaper than those of health care service peers based on all of our valuation measures, but thin margins and regulatory uncertainty are mitigating factors.
1. Sony
(SNE) - Get Report
climbed 3.5% to $35.41. Shares of the Japan-based electronics company have advanced 22% during the past month. Sony is scheduled to report fiscal third-quarter results tomorrow. Analysts estimate the company lost 21 cents a share, excluding certain items.
The numbers
: Sony swung to a fiscal second-quarter loss of $318 million, or 31 cents a share, from a profit of $206 million, or 20 cents a share, in the year-earlier period. Revenue declined 3.5% to $20 billion. Sony's operating margin inched up from 0.9% to 1.3%. The company holds $15 billion of cash and $15 billion of debt. Its 0.5 debt-to-equity ratio reflects conservative leverage.
The stock
: We rate Sony "hold." Its stock surged 82% during the past year, outperforming major U.S. indices. The shares are cheaper than those of electronics peers based on projected earnings, book value, sales and cash flow. They are expensive based on projected earnings. The model gives Sony a lofty financial strength score of 8.9, but a growth score of 2.9.
-- Reported by Jake Lynch in Boston.