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, May 19.

We've upgraded

CNX Gas

( CXG) from hold to buy, driven by its robust revenue growth, increase in net income, expanding profit margins, 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 lackluster performance in the stock itself.

Revenues rose by 16.9% since the same quarter one year prior, and EPS improved. CNX's gross profit margin is 74.4%, having increased from the same quarter last year. Net profit margin of 30.9% outperformed the industry average. Net operating cash flow increased by 65.9% to $126.4 million compared with the year-ago quarter, and net income increased 10%, from $49.9 million to $54.9 million. CNX has a debt-to-equity ratio of 0.1, which is above the industry average, and a quick ratio of 0.2.

We've upgraded

Coca-Cola Femsa

(KOF) - Get Report

from hold to buy, driven by its expanding profit margins over time. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Revenue fell 2.4% since the year-ago quarter, and EPS decreased by 38.5% in the most recent quarter compared to the year-ago one. The company has suffered a declining pattern of earnings per share over the past two years, but we anticipate this trend to reverse over the coming year. The company's 49.5% gross profit margin has decreased from the year-ago quarter. Its 5.9% net profit margin is also lower. The 0.4 debt-to-equity ratio is above the industry average, and the quick ratio is 0.6. Return on equity is lower than it was in the year-ago quarter.

We've upgraded

Precision Castparts

(PCP)

from hold to buy, driven by its expanding profit margins over time. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Precision Castparts reported flat earnings per share in the most recent quarter and has reported somewhat volatile earnings recently, but we feel it is poised for EPS growth in the coming year. Revenue dropped by 9.2% since the year-ago quarter. The 31.1% gross profit margin has managed to increased from the same quarter last year. The 16.2% net profit margin outperformed the industry average. Net income decreased by 6.7% compared with the year-ago quarter, dropping from $279 million to $260.3 million. ROE also decreased.

We've upgraded

Ruddick

( RDK) from hold to buy, driven by its revenue growth, 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 shows low profit margins.

Revenue increased by 3.5% since the same quarter a year ago, though EPS declined slightly. The company has reported somewhat volatile earnings recently, and we feel it is likely to report a decline in earnings in the coming year. Net operating cash flow rose 9.7% to $94.3 million. The 0.4 debt-to-equity ratio is below the industry average, but the quick ratio is 0.3. Net income fell 4.7% compared with the year-ago quarter, from $24.1 million to $22. 9 million.

We've upgraded

Valspar

(VAL) - Get Report

from hold to buy, driven by its largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

The 0.7 debt-to-equity ratio is below the industry average. The company has a quick ratio of 0.7. Revenue fell 20.1% since the year-ago quarter, and EPS decreased by 26.3%. The company has suffered a declining pattern of earnings per share over the past two years, but we anticipate this trend to reverse over the coming year. Net income fell 26.7% compared with the same quarter last year, from $37.9 million to $27.8 million.

The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

Other ratings changes include

El Paso

( EP), upgraded from sell to hold, and

American Superconductor

(AMSC) - Get Report

, also upgraded from sell to hold.

All ratings changes from May 19 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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