Valassis, Equifax, Autoliv Hit Highs
BOSTON (
) -- U.S. indices broke into the black on Monday, soothing the sting of last week's correction. These stocks hit 52-week highs.
3. Valassis Communications
(VCI)
jumped 17% to $24.58. A unit of
News Corp.
(NWS) - Get Report
has agreed to pay Valassis $500 million to settle antitrust charges. Valassis, a direct-mail marketing company, will enter a 10-year contract with the media conglomerate.
The numbers
: Valassis swung to a third-quarter profit of $14 million, or 28 cents a share, from a loss of $5.2 million, or 11 cents a share, in the year-earlier period. Revenue declined 3.5% to $544 million. The company's operating margin stretched from 2.6% to 8.1%. A debt-to-equity ratio of 17 indicates excessive leverage.
The stock
: We rate Valassis "hold." The stock has risen fourteen-fold during the past year, outpacing major U.S. indices and earning a performance score of 9.3 out of 10. The shares are cheap relative to those of publishing peers based on projected earnings, sales and cash flow. They are expensive based on book value.
2. Equifax
(EFX) - Get Report
climbed 4.4% to $33.40. Equifax said it created a new tool to help credit card companies estimate how long it will take customers to pay off balances, as mandated by a new government regulation.
The numbers
: Third-quarter profit decreased 17% to $60 million, or 47 cents a share, as revenue dropped 6.7% to $452 million. Equifax's operating margin narrowed from 26% to 24%. The company possesses weak liquidity, evident in its quick ratio of 0.6. Its 0.7 debt-to-equity ratio indicates reasonable leverage. Equifax is scheduled to report fourth-quarter results on Wednesday.
The stock
: We rate Equifax "buy." The stock has advanced 35% during the past year, more than the
Dow Jones Industrial Average
and
S&P 500 Index
. The shares are undervalued relative to those of professional service peers based on projected earnings, book value and cash flow. They are costly when comparing sales.
1. Autoliv
(ALV) - Get Report
increased 11% to $47.50. Shares of the automotive safety systems company, which reported quarterly results on Friday, have rallied 9.6% during the past month.
The numbers
: Autoliv swung to a fourth-quarter profit of $61 million, or 68 cents a share, from a loss of $38 million, or 55 cents a share, in the year-earlier period. Revenue increased 40% to $1.7 billion. Autoliv's operating margin extended from 1.4% to 11%. A quick ratio of 0.9 and debt-to-equity ratio of 0.7 reflect fiscal improvement.
The stock
: We rate Autoliv "hold." The stock has more than doubled during the past year, outperforming major U.S. indices. The shares are inexpensive compared to those of auto component peers based on all of our valuation measures, including projected earnings, book value, sales and cash flow. The stock has a beta of 2, so it tends to magnify market movements.
-- Reported by Jake Lynch in Boston.