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 16.
from hold to buy, driven by its notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.
Return on equity greatly increased compared with the same quarter lat year, a signal of significant strength within the corporation. Avon's gross profit margin is 64.8%, a decrease over the same period last year. The company's 5.4% net profit margin compared favorably with the industry average. Revenue fell by 12.9% since the year-ago quarter, and EPS decreased by 37.2%. The company has reported somewhat volatile earnings recently, and we think it's likely to report an earnings decline in the coming year. Net income fell 36.5%, from $184.7 million in the year-ago quarter to $117.3 million, outperforming the
and the personal products industry average.
from hold to buy, driven by its revenue growth, growth in earnings per share, increase in net income, expanding profit margins 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 4.5% since the same quarter last year, and EPS improved by 22.7%. The company has demonstrated a two-year pattern of positive EPS growth, which we think will continue. Net income increased by 22.5% compared with the year-ago quarter, to $712 million from $581 million. Exelon's 40.8% gross profit margin is strong, having increased from the year-ago quarter, and its 15.1% net profit margin is above the industry average. Net operating cash flow increased by 171.6% to $2 billion compared with the prior-year quarter.
from hold to sell, driven by its unimpressive growth in net income, poor profit margins and decline in the stock price during the past year.
Net income decreased by 53.7% compared with the year-ago quarter, falling from $4 million to $1.9 million. Krispy Kreme's 17.6% gross profit margin is rather low, though it's increased from the same quarter last year. The 2% net profit margin is significantly lower thatn it was in the year-ago quarter. ROE greatly increased from the year-ago period, a signal of significant strength. EPS declined by 50%.
Shares have fallen 27.9% over the past year, in part reflecting the overall decline in the broad market. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
from sell to hold. Strengths include the company's revenue growth. At the same time, however, we also find weaknesses including deteriorating net income, generally poor debt management and disappointing return on equity.
Revenue increased by 4.2% since the year-ago quarter, outpacing the industry average. EPS, however, declined steeply compared with the year-ago quarter, though the consensus estimate suggests that the company's two-year trend of declining earnings per share should reverse in the coming year. Supervalu's 25.1% gross profit margin has decreased from the same quarter last year, and it's net profit margin trails the industry average. Net operating cash flow fell 38.4% to $450 million.
Shares have tumbled 53% over the past year, underperforming the S&P 500. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
from hold to buy, driven by its reasonable valuation levels, good cash flow from operations, notable return on equity and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Net operating cash flow increased to -$3.3 million, and ROE improved slightly compared with the year-ago quarter, which can be construed as a modest strength in the organization. Revenue fell by 10.4%, and EPS decreased. West's 0.8 debt-to-equity ratio is somewhat low overall but is above the industry average. The 1.5 quick ratio is sturdy.
All ratings changes for June 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.
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