TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.
The following ratings changes were generated on Thursday, May 21.
from hold to buy, driven by its expanding profit margins, attractive valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
America Movil's gross profit margin is 59.4%, having increased from the same quarter last year, but its net profit margin of 17.4% trails the industry average. Revenue fell by 13.7% from the year-ago quarter, and EPS declined by 5.4%. The company has suffered a declining pattern of earnings per share over the past year, but we anticipate this trend reversing over the coming year. The company's current return on equity has slightly decreased from the same quarter one year prior, implying a minor weakness in the organization.
Burlington Northern Santa Fe
( BNI) from hold to buy, driven by its attractive valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Revenue 17.4% since the year-ago quarter, and EPS decreased by 33.8%. We feel the company is likely to report a decline in earnings in the coming year. Net income fell by 35.6% compared with the year-ago quarter, from $455 million to $293 million, and ROE decreased slightly.
( CBE) from hold to buy, driven by its attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
Net operating cash flow increased by 153.4% to $165.2 million compared with the year-ago quarter, but revenue fell by 18.7%, and EPS also decreased. The debt-to-equity ratio of 0.5 is above the industry average, and the company's quick ratio is 0.9. ROE fell from the year-ago quarter, implying weakness within the company.
from hold to buy, driven by its revenue growth, notable return on equity, good cash flow from operations and attractive valuation levels. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.
Revenue increased by 3.9% since the same quarter a year ago, though EPS decreased, and we feel the company is likely to report an earnings decline in the coming year. ROE greatly increased compared with the year-ago quarter, and net operating cash flor rose 38.1% to $1.3 billion.
from sell to hold. Strengths include the company's good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
Net operating cash flow increased by 195.1% to $424 million compared with the same quarter last year. The debt-to-equity ratio, 0.4, is below the industry average, though the quick ratio of 0.9 could be cause for future problems. Revenue fell by 32.9% since the year-ago quarter but still outperformed the industry average, and EPS decreased. ROE has greatly decreased from the same quarter last year, implying weakness. Tyco's gross profit margin of 22.8% has decreased from the year-ago quarter.
All ratings changes for May 21 are listed below.
Note: Our quantitative model makes stock recommendations based on GAAP figures that may differ materially from data as reported by the companies themselves. As a result, rating changes are occasionally driven by so-called nonrecurring items. As always, we urge readers to use TSC Ratings' reports in conjunction with additional information to construct their opinions on the value that should be placed on any given stock.
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