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 Tuesday, June 2.

We've upgraded

ConAgra Foods

(CAG) - Get Report

from hold to buy, driven by its revenue growth, good cash flow from operations, growth in earnings per share, relatively strong performance when compared with the S&P 500 during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Revenue increased by 6.1% since the year-ago quarter, and EPS improved by 26.5%. We feel the company is poised for EPS growth in the coming year. Net operating cash flow increased by 326.4% to $260.5 million compared with the same quarter last year. Return on equity decreased slightly from the same quarter a year ago.

Shares have tumbled by 19.6% over the past year, in part reflecting the market's overall decline. Although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

We've upgraded

Kirby

(KEX) - Get Report

from hold to buy, driven by its largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Kirby's debt-to-equity ratio of 0.3 is below the industry average, and it maintains a quick ratio of 1.1. The 38% gross profit margin has increased from the same quarter last year. Net operating cash flow increased 32.8% to $81.5 million, while revenue fell by 16% and EPS decreased. Net income decreased by 23.6% compared with the year-ago quarter, dropping from $36.7 million to $28 million.

We've upgraded

Mechel

(MTL) - Get Report

from hold to buy, driven by its robust revenue growth, notable return on equity, attractive valuation levels, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.

Revenue leaped by 94.7% since the same quarter last year, and EPS improved significantly. We feel that the company's two-year trend of EPS growth should continue. Net income rose by 147.4% compared with the year-ago quarter, from $216.6 million to $535.7 million, and ROE also greatly increased.

We've upgraded

Tim Hortons

(THI)

from hold to buy, driven by its growth in earnings per share, revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins.

Revenue rose by 10.2% since the same quarter last year, and EPS improved by 12.1%. The company has demonstrated a pattern of positive EPS growth over the past two years. The debt-to-equity ratio of 0.3 is below the industry average, and the quick ratio is about 1. Net operating cash flow increased by 39.6% to $25.8 million compared with the same quarter last year.

Shares are down 18.3% over the past year, in part reflecting the market's overall decline. Although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

We've upgraded

Valmont Industries

(VMI) - Get Report

from hold to buy, driven by its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Revenue increased by 7.8% since the year-ago quarter, and EPS improved. The debt-to-equity ratio of 0.5 is below the industry average, and the quick ratio of 1.5 implies an ability to cover short-term liquidity needs. ROE improved slightly from the year-ago quarter, and net income increased by 20.8%, from $29.7 million to $35.9 million. Net operating cash flow increased by 135.6% to $37.5 million.

All ratings changes from June 2 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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