) -- U.S. stocks dropped after initial unemployment claims rose more than expected. These stocks outmaneuvered benchmarks and hit 52-week highs.
3. Diamond Foods
rose 0.7% to $37.81. Shares of the food products company have increased 8.1% during the past month. Management raised its fiscal 2010 earnings guidance last Friday.
: Fiscal first-quarter net income soared 40% to $15 million and earnings per share climbed 38% to 88 cents, restrained by a higher share count. Revenue declined 7.6% to $181 million. Diamond's operating margin widened from 10% to 14%. The company holds $6.6 million of cash, equating to a poor quick ratio of 0.4. Its 0.6 debt-to-equity ratio reflects conservative leverage.
: We rate Diamond Foods "buy." Its stock appreciated 41% during the past year, more than the
Dow Jones Industrial Average
S&P 500 Index
. The shares are cheap relative to those of food products peers based on trailing earnings, book value and cash flow. They are fairly-valued when considering sales and expensive on the basis of projected earnings.
2. Open Text
jumped 7.1% to $43.43. Shares of the software company, which reported quarterly results yesterday, have advanced 7% during the past month.
: Fiscal second-quarter profit rose to $21 million, or 37 cents a share, from $760,000, or 1 cent per share, in the year-earlier period. Revenue increased 19% to $248 million. Open Text's operating margin expanded from 15% to 19%. The company holds $256 million of cash and $302 million of debt. Its 0.4 debt-to-equity ratio indicates modest leverage.
: We rate Open Text "buy." Its stock has gained 22% during the past year, less than major U.S. indices. The shares are undervalued in comparison to those of internet software peers based on book value, sales and cash flow. They are expensive when weighing trailing earnings. Our quantitative equity model awards Open Text a performance score of 8.6 out of 10, higher than the "buy"-list average.
1. Northrop Grumman
rose 1.9% to $59.59, following the release of its fourth-quarter results. Shares of the aerospace and defense company have risen 1.9% during the past month.
: Northrop Grumman swung to a fourth-quarter profit of $413 million, or $1.31 a share, from an impairment-related loss of $2.5 billion, or $7.75 a share, in the year-earlier period. Revenue inched up 1.7% to $8.9 billion. Northrop's operating margin climbed from negative territory to 7.1%. The company holds $3.3 billion of cash and $4.3 billion of debt.
: We rate Northrop Grumman "hold." Its stock has advanced 21% during the past year, lagging major indices and earning a performance score of 4.8 out of 10. The shares are cheaper than those of aerospace and defense peers based on projected earnings, book value, sales and cash flow. Our model awards Northrop a financial strength score of 6.3 out of 10.
-- Reported by Jake Lynch in Boston.