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 Wednesday, June 10.
from hold to buy, driven by its respectable return on equity which we feel is likely to continue. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Return on equity increased greatly compared with the same quarter last year, a signal of strength within the corporation. Revenue fell by 21.2%, though it outperformed the industry average of a 22.8% drop. EPS also decreased, by 12.7%, though we anticipate that the company's yearlong pattern of declining EPS will reverse over the coming year. Net income decreased by 6.5% to $32.9 million since the year-ago quarter but outperformed the
and the gas utilities industry average. Ferrellgas' gross profit margin of 16.9% has managed to increase from the same period last year. The net profit margin of 5.9% trails the industry average.
from hold to buy, driven by its increase in net income, largely solid financial position with reasonable debt levels by most measures, notable return on equity, good cash flow from operations and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
Net income increased by 3.2% to $321 million compared with the year-ago quarter, outperforming the S&P 500 but underperforming the IT services industry average. Infosys has no debt to speak of and a quick ratio of 5.7, which implies an ability to cover short-term cash needs. ROE has improved slightly compared with the same quarter last year. Net operating cash flow increased by 64.7% to $313 million. The 46% gross profit margin is strong but has decreased from the year-ago quarter. The 28.6% net profit margin compared favorably with the industry average.
from sell to hold. Strengths include the company's solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally poor debt management and poor profit margins.
EPS improved compared with the year-ago quarter, and we feel that the company's yearlong trend of EPS growth should continue. Revenue dropped by 0.3%. The 29.6% gross profit margin has managed to increase from the same period last year. The net profit margin of 2.2% trails the industry average. Pep Boys' debt-to-equity ratio of 0.8 is somewhat low overall but high compared with the industry average. The quick ratio of 0.1 demonstrates weak liquidity.
Shares have risen over the past year, outperforming the S&P 500. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
Thermo Fisher Scientific
from hold to buy, driven by its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
The company's debt-to-equity ratio of 0.1 is below the industry average, and its quick ratio of 2 demonstrates an ability to cover short-term liquidity needs. Net operating cash flow rose 47.6% to $358.7 million compared with the year-ago quarter, and ROE improved slightly. EPS declined by 34%, and we feel the company is poised for EPS growth in the coming year.
from sell to hold. Strengths include the company's revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and premium valuation.
Revenue increased by 7.3% since the year-ago quarter, and EPS improved. VMware's debt-to-equity ratio of 0.2 is very low but above the industry average. The company's 2.8 quick ratio demonstrates an ability to cover short-term cash needs. The 90.5% gross profit margin is very high, having increased from the year-ago quarter, but the net profit margin of 14.9% trails the industry average.
Shares are down 50.4% over the past year, underperforming the S&P 500, but do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, VMware is still more expensive than most of the other companies in its industry.
All ratings changes from June 10 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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