3 Stocks Reiterated As A Buy: DVN, DIS, WFC
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
NEW YORK (TheStreet) -- TheStreet Ratings team reiterated 3 stocks with a buy rating on Tuesday based on 32 different data factors including general market action, fundamental analysis and technical indicators. The in-depth analysis of these ratings decisions goes as follows:
Devon Energy Corp:
(NYSE:
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B-. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- DVN's very impressive revenue growth greatly exceeded the industry average of 18.7%. Since the same quarter one year prior, revenues leaped by 128.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for DEVON ENERGY CORP is rather high; currently it is at 59.78%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -6.80% is in-line with the industry average.
- The current debt-to-equity ratio, 0.52, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that DVN's debt-to-equity ratio is low, the quick ratio, which is currently 0.67, displays a potential problem in covering short-term cash needs.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, DEVON ENERGY CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: Devon Energy Ratings Report
Devon Energy Corporation, an independent energy company, primarily engages in the exploration, development, and production of oil, natural gas, and natural gas liquids (NGLs) in the United States and Canada. Devon Energy has a market cap of $25.3 billion and is part of the basic materials sector and energy industry. Shares are down 0.6% year-to-date as of the close of trading on Monday.
Walt Disney Co:
(NYSE:
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, notable return on equity, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- DIS's revenue growth has slightly outpaced the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 8.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- DISNEY (WALT) CO has improved earnings per share by 23.3% 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, DISNEY (WALT) CO increased its bottom line by earning $4.25 versus $3.38 in the prior year. This year, the market expects an improvement in earnings ($4.89 versus $4.25).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market, DISNEY (WALT) CO's return on equity exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 53.05% to $1,855.00 million when compared to the same quarter last year. In addition, DISNEY (WALT) CO has also modestly surpassed the industry average cash flow growth rate of 47.54%.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 30.56% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: Walt Disney Ratings Report
The Walt Disney Company, together with its subsidiaries, operates as an entertainment company worldwide. The company operates in five segments: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products, and Interactive. Walt Disney has a market cap of $176.9 billion and is part of the services sector and media industry. Shares are up 12.4% year-to-date as of the close of trading on Monday.
Wells Fargo & Co:
(NYSE:
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, expanding profit margins and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- WFC's revenue growth has slightly outpaced the industry average of 4.6%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- WELLS FARGO & CO's earnings per share improvement from the most recent quarter was slightly positive. 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, WELLS FARGO & CO increased its bottom line by earning $4.10 versus $3.89 in the prior year. This year, the market expects an improvement in earnings ($4.18 versus $4.10).
- The gross profit margin for WELLS FARGO & CO is currently very high, coming in at 93.37%. Regardless of WFC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WFC's net profit margin of 25.43% significantly outperformed against the industry.
- The net income growth from the same quarter one year ago has exceeded that of the Commercial Banks industry average, but is less than that of the S&P 500. The net income increased by 1.8% when compared to the same quarter one year prior, going from $5,610.00 million to $5,709.00 million.
- You can view the full analysis from the report here: Wells Fargo Ratings Report
Wells Fargo & Company provides retail, commercial, and corporate banking services to individuals, businesses, and institutions. Wells Fargo has a market cap of $282.3 billion and is part of the financial sector and banking industry. Shares are up 1.3% year-to-date as of the close of trading on Monday.
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