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, April 16.
We've upgraded IT services provider
from hold to buy, driven by its revenue growth, impressive record of earnings per share growth, increase in net income, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Revenue rose by 11.7% since the same quarter last year, and EPS are up 18.2% compared with the year-ago quarter. The company has demonstrated a pattern of positive EPS growth over the past two years. Net income rose 9.6%, from $72.6 million in the year-ago quarter to $79.6 million. CGI has a debt-to-equity ratio of 0.2, which is above the industry average, and a quick ratio of 0.9.
We've upgraded real estate and landscape nursery company
Griffin Land & Nurseries
from sell to hold. Strengths include its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
Revenue increased by 3.2% since the year-ago quarter, though EPS declined. The debt-to-equity ratio of 0.4 is below the industry average, and the company has a quick ratio of 1. Net income fell from $1.4 million in the year-ago quarter to -$5 million. Return on equity also decreased compared with the year-ago quarter.
Shares are up on the year, outperforming the
over the same time period. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
We've upgraded e-commerce and interactive marketing services provider
( GSIC) from sell to hold. Strengths include its solid stock price performance, increase in net income and robust revenue growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.
Net income is up 48.1% compared with the year-ago quarter, rising from $16.5 million to $24.4 million. Revenue rose 16.8%, and EPS are also up. We feel the company is poised for EPS growth in the coming year. The debt-to-equity ratio of 1 is above the industry average. The company maintains a 0.9 quick ratio. ROE fell compared with the year-ago quarter.
, of which Hawaiian Airlines is a subsidiary, from sell to hold. Strengths include the company's robust revenue growth, notable return on equity and good cash flow from operations. However, we also find weaknesses including generally poor debt management, poor profit margins and a decline in the stock price during the past year.
Revenue rose by 19.9% since the year-ago quarter, though EPS decreased. ROE is up compared with the same quarter last year. Hawaiian Holdings' gross profit margin of 28% has increased from the same period last year. The 4.9 debt-to-equity ratio is below the industry average. The company maintains a quick ratio of 0.8.
We've downgraded oil and natural gas company
from hold to sell, driven by its decline in the stock price during the past year, feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and weak operating cash flow.
EPS have declined in the most recent quarter compared with the year-ago quarter. The company has reported a trend of declining EPS over the past two years. Net income fell from $1.8 million in the year-ago quarter to -$8.6 million. ROE also greatly decreased, and net operating cash flow fell 49.5% to $820,000.
Shares are down 12.1% over the past year, in part reflecting the market's overall decline (which was actually deeper). Other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
All ratings changes from April 16 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.
TheStreet.com Ratings, recently cited for Best Stock Selection from October 2007 through February 2009 , is an independent research provider that combines fundamental and technical analysis to offer investors tremendous value in volatile times. To see how your portfolio can use this research,