Each weekday, TheStreet.com Ratings updates its ratings on the stocks it covers. The proprietary ratings model projects a stock's total return potential over a 12-month period, including both price appreciation and dividends. Buy, hold or sell ratings designate how the Ratings group expects these stocks to perform against a general benchmark of the equities market and interest rates.
While the ratings model is quantitative, it uses both subjective and objective elements. For instance, subjective elements include expected equities market returns, future interest rates, implied industry outlook and company earnings forecasts. Objective elements include volatility of past operating revenue, financial strength and company cash flows.
, an investment management company, has been upgraded to buy. The company has an impressive record of growth in earnings per share, net income and revenue, along with expanding profit margins and good cash flow from operations.
Invesco recently reported that second-quarter net income rose 42% to $261.5 million, or 21 cents a share, while revenue climbed 22.9% to $722.5 million, including $34.4 million in performance fees. Total assets under management increased 19% to $491.6 billion. Net inflows for long-term products totaled about $700 million, and money market net inflows were $1.8 billion. Invesco had been rated hold since June.
, a real estate investment trust, has been upgraded to hold. The company has seen growth in revenue and earnings per share, as well as expanding profit margins. However, net income has been quite unimpressive.
Macerich recently reported that second-quarter funds from operations increased 18% to $100.7 million, or $1.04 a share, from a year ago. Wall Street was expecting the company to report FFO of $1.03 a share. At the same time, net income sank 48% to $13.4 million, or 19 cents a share, while revenue increased 3% to $215.8 million. Macerich had been rated sell since June.
has been downgraded to hold. While the company has enjoyed revenue growth, reasonable valuation levels and good cash flow from operations, it has also experienced deteriorating net income, disappointing return on equity and poor profit margins.
LifePoint recently reported that second-quarter net income slipped to $13.4 million, or 23 cents a share, from $34.8 million, or 62 cents a share, a year earlier. Income from continuing operations fell 34% to $24.6 million, or 43 cents a share. The quarter included impairment charges of $8.5 million, or 15 cents a share. Revenue climbed 17% to $654.3 million. The company had been rated buy since May 2006.
Compass Minerals International
, which produces inorganic materials, including salt, has been downgraded to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, it has also experienced unimpressive growth in net income and poor profit margins.
Compass Minerals International recently reported a second-quarter loss of a loss of $3.2 million, or 10 cents a share, compared with a loss of $2.1 million, or 7 cents a share, a year ago. Revenue increased 18% to $127.5 million. The company had been rated buy since December.
, which makes phosphate and potash crop nutrients, has been upgraded to buy. The company has enjoyed growth in revenue, earnings per share and net income, along with a solid stock price performance. These strengths are expected to outweigh low profit margins.
Mosaic recently reported that it swung to a fiscal fourth-quarter profit, with earnings of $202.6 million, or 46 cents a share, compared with a loss of $180.9 million, or 48 cents a share, a year ago. Sales increased to $1.68 billion from $1.33 billion. For the full year, Mosaic earned $419.7 million, or 95 cents a share, compared with a loss of $121.4 million, or 35 cents a share, a year ago. Sales totaled $5.77 billion, up from $5.31 billion. The company had been rated hold since February.
Additional ratings changes are listed below.